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

Question

Quizplus · Accepted Answer

While the price of an equivalent put option is a factor needed to calculate the value of a European call option, it is not necessary for an American call option as it can be exercised at any time prior to expiration regardless of the price of the equivalent put option. The other factors mentioned (A, B, D, E) are all necessary in determining the value of an American call option.

Which of the Following Is not a Factor Needed to Calculate