The Value of Call Options, All Else Being Equal, Is

question 94

Multiple Choice

The value of call options, all else being equal, is less when there is a greater:

• A)share price
• B)exercise price
• C)degree of volatility of the underlying asset
• D)time to expiry.
• E)None of these are correct.

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Definitions:

Plausible

Seeming reasonable or probable under the circumstances.

Production Function

A mathematical model that describes the relationship between inputs used in production and the resultant output.

Maximum Output

The highest amount of production that a company can achieve within a given period with the available resources.

Inputs

The resources, materials, and labor that are used in the production process to create goods and services.