The price of a call option is likely to decrease while the price of a put option is likely to increase when the current stock price decreases. This is because the value of a call option is derived from the potential for the stock price to increase above the strike price. If the stock price decreases, the likelihood of the stock price rising above the strike price also decreases, thereby reducing the value of the call option. On the other hand, the value of a put option increases when the stock price decreases. This is because a put option gives the holder the right to sell the stock at the strike price. If the stock price decreases, the holder of the put option can still sell the stock at the higher strike price, making the put option more valuable.

Choice A is incorrect. The price of a call option will not increase when the underlying stock price decreases. This is because the value of a call option increases as the underlying stock price increases, giving the holder the right to buy at a lower strike price and sell at a higher market price. Therefore, if the stock price decreases, it reduces this potential benefit and thus reduces the value of the call option.

Choice C is incorrect. While it's true that put options increase in value when stock prices decrease (as they give holders an opportunity to sell at a higher strike price), there would indeed be an impact on Raj's call option as well. As explained above, if Red Horse Auto Inc.'s current stock prices decrease, this would reduce Raj's potential benefit from his call option and thus its value.