The premium on a call option is primarily a function of the difference in spot price relative to the strike price X, the length of time until expiration T, and the volatility of the currency o. C-(S-X,T, o) For each characteristic of a call option, use the table to indicate whether that would lead to a higher call option premium or a low call option premium (all else equal). Characteristic Higher Call Option Premium Lower Call Option Premium O A lower spot pnce relative to the strike price o A longer time before expiration O minimum A O A lower level of volatility for the currency maximum amount of dollars needed When using a call option to hedge payables in an international currency, a U.5. based MNC can lock in the to obtain the needed foreign currency