All of the following factors affect the price of a stock option except
A)the risk-free rate.
B)the riskiness of the stock.
C)the time to expiration.
D)the expected rate of return on the stock.
E)None of the options

Question

Quizplus · Accepted Answer

The risk-free rate, riskiness of the stock, and time to expiration are directly related to the price of the option; the expected rate of return on the stock does not affect the price of the option.

All of the Following Factors Affect the Price of a Stock