For Call Options,the Positive Relationship Between Price and Time Is

question 17

Multiple Choice

For call options,the positive relationship between price and time is

• A)Because the longer the time period the more volatility in the stock price
• B)Caused by an increasing intrinsic value due to lower present values of the exercise price for longer time periods
• C)Related to the opportunity to have more time to take advantage of the fluctuations in the price of the stock
• D)Related to the fact that you can use the riskless rate of interest to leverage your gains

---

Definitions:

Total Cost

The aggregate amount of all costs involved in producing a product or delivering a service, including direct materials, labor, and overhead expenses.

Indirect Manufacturing Cost

Costs in manufacturing that are not directly traceable to individual products, such as maintenance, utilities, and factory supervision.

Conversion Costs

The combined costs of direct labor and manufacturing overheads involved in transforming raw materials into finished goods.

Direct Labor

The wages paid to workers who are directly involved in the production of goods or services.