Asked by Michelle Sutton on Jul 04, 2024
Verified
The value of a put increases as the price of the underlying stock increases.
Put Increases
An erroneous or unclear term; possibly refers to the increase in value of a put option as the underlying asset's price decreases.
Underlying Stock
The basic security that one has the right to buy or sell under the terms of an option contract or other derivative agreement.
Value
The financial, tangible, or estimated value of a property, product, or service.
- Absorb knowledge on the aspects that influence the market value of call options.
- Discern the relationship between the price variations of the underlying stock and the call option's worth.
Verified Answer
VG
Vishal GuptaJul 10, 2024
Final Answer :
False
Explanation :
The value of a put option typically decreases as the price of the underlying stock increases, because a put option gives the holder the right to sell the stock at a specified price, and this becomes less valuable as the stock price moves higher.
Learning Objectives
- Absorb knowledge on the aspects that influence the market value of call options.
- Discern the relationship between the price variations of the underlying stock and the call option's worth.