Which One of the Following Variables Influence the Value of Put

question 66

Multiple Choice

Which one of the following variables influence the value of put options
I. Level of interest rates
II. Time to expiration of the option
III. Dividend yield of underlying stock
IV. Stock price volatility

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

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Definitions:

Effective Annual Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate, taking compound interest into account.

Compounded Value

Refers to the result of reinvesting the interest or earnings of an investment, causing it to grow exponentially over time.

Annuity Due

An annuity with payments occurring at the beginning of each period.

Amortized Mortgage

A type of loan where the principal and interest are paid down through fixed monthly payments over the loan's term, leading to a fully paid-off mortgage.