Which of the following events are likely to increase the market value of a call option on an ordinary share? Explain. a) An increase in the stock price. b) An increase in the volatility of the stock price. c) An increase in the risk-free rate d) A decrease in the time until the option expires
Which of the following events are likely to increase the market value of a call option on an ordinary share? Explain. a) An increase in the stock price. b) An increase in the volatility of the stock price. c) An increase in the risk-free rate d) A decrease in the time until the option expires
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Which of the following events are likely to increase the market value of a call option on
an ordinary share? Explain.
a) An increase in the stock price.
b) An increase in the volatility of the stock price.
c) An increase in the risk-free rate
d) A decrease in the time until the option expires
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