Final answer:
The value of a European call option will likely decrease if the dividends paid by the underlying asset increase. In the financial market, an increase in the supply of capital can lead to both a decline in interest rates and an increase in the quantity of loans made and received.
Step-by-step explanation:
If dividends paid by the underlying increase, the value of a European call option will most likely decrease. Dividend payments on the underlying asset reduce the spot price of the asset, which in turn reduces the potential benefit of owning a call option. Since a call option gives the holder the right but not the obligation to purchase the underlying asset at a fixed strike price, any reduction in the asset's expected future price due to dividend payouts can negatively impact the call option's value.
Addressing the other question, a change in the financial market that will lead to a decline in interest rates is c. a rise in supply of capital. Conversely, a change that will lead to an increase in the quantity of loans made and received is also c. a rise in supply of capital, assuming other factors remain constant.