The value of an option depends on the stock's price, the risk-free rate, and the
A) Exercise price.
B) Variability of the stock price.
C) Option's time to maturity.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

The value of an option depends on multiple factors such as the stock's price, the risk-free rate, the exercise price, the variability of the stock price, and the option's time to maturity. Therefore, the best choice would be D - all of the above, as all three factors mentioned in the options contribute to the value of an option.

The Value of an Option Depends on the Stock's Price