Question #67
Reading: Reading 31 Valuation of Contingent Claims
PDF File: Reading 31 Valuation of Contingent Claims.pdf
Page: 31
Status: Unattempted
Correct Answer: A
Question
The value of a European call option on an asset with no cash flows is positively related to all of the following EXCEPT:
Answer Choices:
A. exercise price
B. risk-free rate
C. time to exercise
Explanation
The value of a call option decreases as the exercise price increases.