Other Things Held Constant, the Value of an Option Depends

question 5

Multiple Choice

Other things held constant, the value of an option depends on the stock's price, the risk-free rate, and the

• A)Strike price.
• B)Variability of the stock price.
• C)Option's time to maturity.
• D)All of the above.
• E)None of the above.

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Definitions:

Interest Rate

It's the percentage at which interest is paid by borrowers for the use of money that they borrow from lenders.

GDP

A synonym for Gross Domestic Product, it is the monetary measure of all final goods and services produced within a country's borders in a specific time period.

Money Supply

The complete accumulation of assets measured in money terms within an economy at any specified moment, including coins, cash, and the deposits across checking and savings accounts.

Interest Rate

The cost of borrowing money, expressed as a percentage of the total amount loaned, or the profit earned on savings and investments.