Both call and put options are affected by the following five factors: the exercise price, the underlying stock price, the time to expiration, the stock’s standard deviation, and the risk-free rate. However, the direction of the effects on call and put options could be different.
Use the following table to identify whether each statement describes put options or call options.

1. When the exercise price increases, option prices increase.


2. An option is more valuable the longer the maturity.


3. The effect of the time to maturity on the option prices is indeterminate.


4. As the risk-free rate increases, the value of the option increases.