Which of the Following Factors Affects the Price of an Option

question 19

Multiple Choice

Which of the following factors affects the price of an option?

• A) time to expiry
• B) risk-free rate of return
• C) exercise price
• D) all of these options

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Definitions:

Investment Company Act

A United States federal law that was enacted in 1940 to regulate the organization of investment companies and the activities they engage in, primarily to protect investors.

Exploitation

The act of unfairly using someone or something for one’s own advantage or profit, often in an unethical or unjust manner.

Small Investors

Individuals who invest modest amounts of money in financial markets or ventures, lacking the significant resources of institutional investors.

Blue-sky Laws

State regulations designed to protect investors from securities fraud by requiring sellers of new issues to register their offerings and provide financial details.