Which statement best explains why small changes in the underlying asset's price can lead to disproportionately large percentage changes in an option's premium?

The complete absence of intrinsic value in out$-$of$-$the$-$money options amplifies percentage moves due solely to time value.

The pricing model for options eliminates the cost of carry, thereby exaggerating relative price movements.

Since the option's premium is only a small fraction of the cost to acquire the underlying asset outright, even modest shifts in the asset's price result in high percentage changes in the option's value.

The binding obligation on the option seller forces the premium to adjust dramatically with every market fluctuation.