The value of a call option is negatively related to:
I. Exercise price
II. Risk-free rate
III. Time to expiration
A) I only
B) II only
C) III only
D) II and III only

Question

Quizplus · Accepted Answer

The value of a call option is negatively related to the exercise price because a higher exercise price makes the option less attractive. The risk-free rate and time to expiration generally have a positive relationship with the value of a call option.

The Value of a Call Option Is Negatively Related To