Other things equal, the price of a stock call option is positively correlated with which of the following factors?
A) The stock price
B) The time to expiration
C) The stock volatility
D) The exercise price
E) The stock price, time to expiration, and stock volatility

Question

Quizplus · Accepted Answer

The price of a stock call option is positively correlated with the stock price, time to expiration, and stock volatility. A higher stock price increases the likelihood that the option will be in-the-money at expiration, a longer time to expiration gives the stock more opportunity to increase in value, and higher volatility increases the potential for the stock to move above the exercise price.

Other Things Equal, the Price of a Stock Call Option