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.

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Definitions:

Recycle Nutrients

The process of breaking down organic matter and converting it into nutrients that can be used again by plants, contributing to the sustainability of ecosystems.

Consumer

An organism that obtains its energy by eating other organisms, unable to produce its own food through photosynthesis or chemosynthesis.

Biomes

Large ecological areas on the planet's surface, with flora and fauna adapting to their environment, such as forests, deserts, and grasslands.