Consider a stock that pays no dividends. The interest rate is zero. A call and a put have one year to expiration and another call and put have two years to expiration. All are European and have the same strike. Which is worth more? HINT: think of the value of an option with only one day left until maturity.

• A.The two-year call is worth more than the one-year call and the two-year put is worth less than the one-year put.
• B.The two-year call is worth less than the one-year call and the two-year put is worth less than the one-year put.
• C.The two-year call is worth more than the one-year call and the two-year put is worth more than the one-year put.
• D.The two-year call is worth less than the one-year call and the two-year put is worth more than the one-year put.