Identify the incorrect statement below about Call premiums. A. The higher the interest rate the cheaper the Call premium. B. The later the time to expiry the higher the Call premium. C. The higher the exercise price the cheaper the Call premium. D. The lower the share price the cheaper the Call premium.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 6MC
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Identify the incorrect statement below about Call premiums.
A. The higher the interest rate the cheaper the Call premium.
B. The later the time to expiry the higher the Call premium.
C. The higher the exercise price the cheaper the Call premium.
D. The lower the share price the cheaper the Call premium.
Transcribed Image Text:Identify the incorrect statement below about Call premiums. A. The higher the interest rate the cheaper the Call premium. B. The later the time to expiry the higher the Call premium. C. The higher the exercise price the cheaper the Call premium. D. The lower the share price the cheaper the Call premium.
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