All of the following factors affect the price of a share option except the:

Question

Quizplus · Accepted Answer

The price of a share option is influenced by the riskiness of the share, the risk-free rate, and the time to expiration, but not directly by the expected rate of return on the share. Option pricing models, like the Black-Scholes model, consider volatility (riskiness), time, and risk-free interest rates, but the expected return on the underlying asset is not a direct input.

All of the Following Factors Affect the Price of a Share