An Increase in Which of the Following Will Increase the Value

question 51

Multiple Choice

An increase in which of the following will increase the value of a call?
I.time to expiration
II.underlying stock price
III.risk-free rate of return
IV.price volatility of the underlying stock

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

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Definitions:

Responsibility Accounting Reports

Internal financial reports that track the financial performance of specific departments, managers, or units, highlighting areas of responsibility.

Profit Centers

Parts of a company treated as standalone businesses responsible for generating their own revenues and profits.

Income Statements

A financial report that details a company's revenues, expenses, and profits over a specific period, showing how the net income is derived.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, computed as the net profit of the investment divided by the cost of the investment.