Question

Int. rates fall, call price sets____ Int. rates rise, put price sets_____.

A) Higher, Higher.
B) Lower, Higher.
C) Higher, Lower.
D) Lower, Lower.

Answer 1

When interest rates fall, call prices set higher. When interest rates rise, put prices set higher.

Step-by-step explanation:

When interest rates fall, call prices will set higher. On the other hand, when interest rates rise, put prices will set higher. Therefore, the correct answer is option A) Higher, Higher.