All of the following are variables used to determine a call option's price except
A)the risk-free rate
B)the probability of stock price movement
C)the exercise price
D)the possible future stock prices at expiration
E)none of the above

Question

Quizplus · Accepted Answer

Although the probability of stock price movement can influence an investor's decision to purchase a call option, it is not a variable used to determine the option's price. Instead, the primary variables used to price call options are the risk-free rate, exercise price, and possible future stock prices at expiration.

All of the Following Are Variables Used to Determine a Call