Deeble Construction Co.’s stock is trading at $30 a share. Call options on the company’s stock are also available, some with a strike price of $25 and some with a strike price of $35. Both options expire in three months. Which of the following best describes the value of these options? a. The options with the $25 strike price will sell for $5.
b. The options with the $25 strike price will sell for less than the options with the $35 strike price.
b. The options with the $25 strike price have an exercise value greater than $5.
d. The options with the $35 strike price have an exercise value greater than $0.
e. If Deeble's stock price rose by $5, the exercise value of the options with the $25 strike price would also increase by $5.