Which of the following is not a factor needed to calculate the value of an American call option? A) The stock price B) The exercise price C) The exchange on which the option is listed D) The volatility of the underlying stock E) The interest rate

Question

Quizplus · Accepted Answer

The exchange on which the option is listed is not a factor needed to calculate the value of an American call option. The other factors listed - stock price, exercise price, volatility of the underlying stock, and interest rate - are all necessary inputs for option pricing models such as Black-Scholes. However, the exchange on which the option is listed simply provides a marketplace for trading the option and does not affect its intrinsic value.

Which of the Following Is not a Factor Needed to Calculate