Factors Influence the Price of an Option Include the ________

question 58

Multiple Choice

Factors influence the price of an option include the ________.

• A) future price of the underlying asset and the strike price.
• B) time to expiration of the option and the expected price volatility of the underlying asset over the past year.
• C) long-term and the risk-free interest rate over the life of the option.
• D) the strike price and the anticipated cash payments on the underlying asset over the life of the option.

---

Definitions:

Sensitization

An increased reaction to a stimulus following repeated exposure to it, often used in the context of allergic reactions or drug tolerance.

Long-term Potentiation

A lasting increase in signal transmission between two neurons that results from their simultaneous activation, believed to be a cellular mechanism underlying learning and memory.

Synaptic Connections

The points at which neurons (nerve cells) communicate with each other, passing messages through chemical signals.

Learning

Learning is the process of acquiring new or modifying existing knowledge, behaviors, skills, values, or preferences.