Other Things Equal, the Price of a Stock Call Option

question 6

Multiple Choice

Other things equal, the price of a stock call option is positively correlated with which of the following factors?

• A) The stock price
• B) The time to expiration
• C) The stock volatility
• D) The exercise price
• E) The stock price, time to expiration, and stock volatility

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Definitions:

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The concept that reality is composed of many interacting components that can be difficult to fully understand or predict.

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A set of principles and models that attempts to explain the relationships among economic variables and to predict future economic outcomes.

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