Which of the following is/are correct? $\begin{array}{c}
\begin{array}{lll}
I. \text {The underlying stock price.}\
II. \text {The time to expiration.}\
III. \text {The risk-free rate.}\
IV \text {The strike price.}
\end{array}
\begin{array}{c}
\text{ Call}\
+ \
- \
+ \
+ \

\end{array}
\begin{array}{c}
\text{ Put}\
- \
+ \
- \
+ \

\end{array}
\end{array}$

A) II and III only
B) I, II, and II only
C) I and IV only
D) I, III, and IV only
E) I, II, III, and IV

Question

Which of the following is/are correct? $\begin{array}{c}
\begin{array}{lll}
I. \text {The underlying stock price.}\
II. \text {The time to expiration.}\
III. \text {The risk-free rate.}\
IV \text {The strike price.}
\end{array}
\begin{array}{c}
\text{ Call}\
+ \
- \
+ \
+ \

\end{array}
\begin{array}{c}
\text{ Put}\
- \
+ \
- \
+ \

\end{array}
\end{array}$

A) II and III only
B) I, II, and II only
C) I and IV only
D) I, III, and IV only
E) I, II, III, and IV

Quizplus · Accepted Answer

For a call option, the option price increases with the underlying stock price (I+), time to expiration (II+), and strike price (IV+), and decreases with the risk-free rate (III-). 
For a put option, the option price increases with the strike price (IV+), time to expiration (II+), and risk-free rate (III+), and decreases with the underlying stock price (I-)

Which of the Following Is/are Correct A) II and III Only B) I, II, and II

Which of the Following Is/are Correct A) II and III Only
B) I, II, and II