Which of the Following Affect the Value of Puts and Calls

question 68

Multiple Choice

Which of the following affect the value of puts and calls written on shares of common stock?
I. price volatility of the underlying stock
II. current market price of the underlying stock
III. length of time until the option expiration date
IV. current market interest rate

• A) I and II only
• B) I, II and III only
• C) II, III and IV only
• D) I, II, III and IV

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Definitions:

Leniency Contract

An informal agreement where one person agrees to treat another person more leniently or forgivingly than the situation may warrant.

Core Attributes

The fundamental qualities or characteristics that define an entity or concept, central to its identity or function.

Social Impact

The effect that other people have on our attitudes and behaviour, usually as a consequence of factors such as group size, and temporal and physical immediacy.

Convergent-Divergent Theory

explores the ability to generate multiple solutions to a problem (divergent thinking) versus the ability to find the single best solution (convergent thinking).