Final answer:
The value of a call option on a stock is lower when the exercise price is higher, as the contract approaches maturity, if the stock decreases in value, and not directly because of a stock split as adjustments are made to reflect such changes.
Step-by-step explanation:
The value of a listed call option on a stock is usually lower when the exercise price is higher. This is because the higher the exercise price, the less likely the option will be in the money, meaning the stock price is above the exercise price, at its expiration. Therefore, the option is less desirable to buyers. An option also decreases in value as it approaches maturity, assuming it is out of the money, due to the diminishing time value.
Moreover, if the stock decreases in value, the call option becomes less valuable because there is less likelihood that it will be in the money before expiry. Lastly, in the case of a stock split, if not accounted for, it could ostensibly lower the value since the exercise price would need to be adjusted to reflect the split. However, in practice, options are typically adjusted to reflect stock splits to maintain the fair value.