According to the Black Scholes (1973)option pricing model,option value is a function of stock price,exercise price,time to maturity,interest rate,and volatility of the underlying asset.

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This is the basic principle of the Black Scholes option pricing model. It assumes that option value is influenced by stock price, exercise price, time to maturity, interest rate, and volatility of the underlying asset.

According to the Black Scholes (1973)option Pricing Model,option Value Is