Which of the Following Is Not a Determinant of the Value

question 2

Multiple Choice

Which of the following is not a determinant of the value of a call option in the Black-Scholes model?

• A) The interest rate
• B) The exercise price of the stock
• C) The price of the underlying stock
• D) The beta of the underlying stock

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Definitions:

Conditional Contracts

Contracts that require certain conditions to be met before they can be fully enforceable or before an obligation to perform arises.

Equity Theory

A theory of motivation that posits individuals assess their job satisfaction and motivation based on their perception of fairness in the exchange of inputs and outcomes in their employment.

Comparison Person

An individual used as a reference point in social comparison processes, influencing one's self-evaluation, feelings, and behaviors.

Inequity

A condition stemming from unfair, unjust treatment or disparities among individuals or groups, often in terms of resources, rights, or opportunities.