Which of the following variables affect the value of options?
i.Difficulty of interest rates
ii.Time to maturity of the option
iii.Share price volatility
iv.Dividend yield on the underlying share

Question

Quizplus · Accepted Answer

All the listed variables affect the value of options. Interest rates influence the cost of carrying positions, time to maturity affects the time value of options, share price volatility impacts the likelihood of options ending in the money, and dividend yield affects the underlying share price, which in turn influences option pricing.

Which of the Following Variables Affect the Value of Options