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Increase in rate of interest:

<p>A. Increase call-option value and decrease put-option value</p> <p>B. Decrease call-option value and increase put-option value</p> <p>C. Increase call-option value and increase put-option value</p> <p>D. Decrease call-option value and decrease put-option value</p>

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Question added by Mohammad Ali , Accounts Officer ( Contract) , Bharat Pumps & Compressors Ltd Naini Allahabad
Date Posted: 2014/10/28
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VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

A. Increase call-option value and decrease put-option value

  • As interest rates increase call options tend to increase slightly in price, all else being equal.
  • As interest rates increase put options tend to decrease slightly in price, all else being equal.

 

 

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