Q535
Consider call option writing, probability that a buyer would have positive payoff increases with the
A.
increase in stock price
B.
decrease in stock price
AnswerC.
increase in maturity duration
D.
decrease in maturity duration
Answer: Option B
Solution
Answer: Option B
Solution:
Considering call option writing, probability that a buyer would have positive payoff increases with the decrease in stock price. Writing a call option means that you are selling a call option. If you sell a call (also know as a "short call") then you are obliged to sell stock at the strike price.