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Consider a firm whose stock price has just declined by USD 1. You are analyzing the potential impact of this decline on both a call option and a put option. Each of these options has a strike price of USD 50 and is set to expire in 5 days. Based on this market movement, evaluate which of the following scenarios is most likely:
Scenario | Call Value Change | Put Value Change |
---|---|---|
A | Decreases by USD 0.07 | Increases by USD 0.89 |
B | Decreases by USD 0.07 | Increases by USD 0.01 |
C | Decreases by USD 0.94 | Increases by USD 0.01 |
D | Decreases by USD 0.94 | Increases by USD 0.89 |