Other Things Equal, the Price of a Stock Call Option

question 82

Multiple Choice

Other things equal, the price of a stock call option is positively correlated with the following factors except

• A) the stock price.
• B) the time to expiration.
• C) the stock volatility.
• D) the exercise price.

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Definitions:

All Cash Deal

A type of transaction where the purchase of a company or asset is made entirely with cash, without the use of stocks or other forms of financing.

Incremental Value

The additional value generated from a particular action or decision, compared to what would have occurred without it.

Equity-Financed

A method of raising capital by selling company shares to investors as opposed to incurring debt.

Incremental Value

Refers to the additional value generated by undertaking a certain action, decision, or investment, compared to doing nothing.