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
C. increase in maturity duration
D. decrease in maturity duration
Answer: Option B
Solution (By Examveda Team)
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.This Question Belongs to Management >> International Finance And Treasury
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how can i justify that answere with mathematical statement??