According to the Black/Scholes option valuation
Model, a call option's value increases if
A) stock prices increase and interest rates decrease
B) the time to expiration decreases and interest rates increase
C) the variability of the stock's return increases and stock prices increase
D) interest rates decrease and the variability of the stock's return increases

Question

Quizplus · Accepted Answer

The Black-Scholes model shows that a call option's value increases with higher stock prices and greater volatility of the stock's return, as both factors increase the likelihood of the option being profitable at expiration.

According to the Black/Scholes Option Valuation