Which one of the following variables influences the value of put options?I) Level of interest ratesII) Time to expiration of the optionIII) Dividend yield of underlying stockIV) Stock price volatility
A) I and IV only
B) II and III only
C) I, II, and IV only
D) I, II, III, and IV
E) I, II, and III only

Question

Quizplus · Accepted Answer

All four variables influence the value of put options. Interest rates affect the cost of carrying positions, time to expiration affects the time value, dividend yield influences the underlying stock's expected price changes, and stock price volatility affects the option's potential to end in the money.

Which One of the Following Variables Influences the Value of Put