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Examveda

In an option pricing, a rises in risk free rate results in option's value

A. slight time decreases

B. slight increases

C. slight decreases

D. slight time increases

Answer: Option B

Solution(By Examveda Team)

In an option pricing, a rises in risk free rate results in option's value slightly increases. Option pricing is the amount per share at which an option is traded. Although the option holder is not obligated to exercise the option, the seller must buy or sell the underlying instrument if the option is exercised.

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