In the Black-Scholes Option Pricing Model,an Increase in Time to Expiration

question 39

Multiple Choice

In the Black-Scholes option pricing model,an increase in time to expiration (T) will cause

• A) An increase in call value and an increase in put value
• B) An increase in call value and a decrease in put value
• C) A decrease in call value and an increase in put value
• D) A decrease in call value and a decrease in put value
• E) An increase in call value and an increase or decrease in put value

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Definitions:

Liens

Legal claims or rights against property that secure the payment of a debt or the discharge of an obligation to the property’s owner.

Conditional Estate

A type of property ownership that is subject to certain conditions or events, which, if not met or occur, can alter or terminate the estate.

Modern Wing

In architecture, it typically refers to a contemporary extension or section added to an existing building or structure, often characterized by modern design elements.

Action For Waste

A legal cause of action by a property owner or lessor against a lessee for substantial damage caused to the property, diminishing its value.