Using the Black-Scholes Model to Value a Call Option Shows

question 52

Multiple Choice

Using the Black-Scholes model to value a call option shows that when the other four variables are held fixed, the option price will be higher if the

• A) price of the stock rises.
• B) time to maturity is shorter.
• C) exercise price is higher.
• D) riskfree rate is lower.

---

Definitions:

Pain Relief

The alleviation of pain through medication, therapy, or other medical interventions.

Depressants

Substances that reduce the functioning of the nervous system, often used to induce calmness or sleep.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for processing and sending out neural signals.

Slow Down

A decrease in speed or rate, often advised as a cautionary measure to prevent accidents or errors.