The effect of a decrease in the spot price on call and put options would be:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. the intrinsic value of the call options would decrease and the intrinsic value of the put options would increase
B. the intrinsic value of the call options would increase and the intrinsic value of the put options would decrease
C. the intrinsic value of both the call and put options would increase
D. the intrinsic value of both the call and put options would decrease
Answer:A
The effect of a decrease in the spot price on call and put options would be:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. the intrinsic value of the call options would decrease and the intrinsic value of the put options would increase B. the intrinsic value of the call options would increase and the intrinsic value of the put options would decrease C. the intrinsic value of both the call and put options would increase D. the intrinsic value of both the call and put options would decrease