Other Things Equal, the Price of a Stock Call Option

question 82

Multiple Choice

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

• A) the stock price.
• B) the time to expiration.
• C) the stock volatility.
• D) the exercise price.

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Definitions:

Realized and Unrealized Gains

Profits made from the sale of assets (realized gains) versus increases in the value of assets still held (unrealized gains).

Entity Approach

A method in accounting that treats a business as separate from its owners or stakeholders for reporting and evaluation purposes.

Consolidated Balance

A financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as if they are a single entity.

Retained Earnings

Profits generated by a company that are not distributed to shareholders as dividends, but are kept for reinvestment in the business or to pay off debt.