Which of the following is/are false? $\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) I and III only
B) II and IV only
C) II and III only
D) I, II, and III only
E) II, III, and IV only

Question

Which of the following is/are false? $\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) I and III only
B) II and IV only
C) II and III only
D) I, II, and III only
E) II, III, and IV only

Quizplus · Accepted Answer

The time to expiration generally increases the value of both call and put options, so it should be positive for both. The risk-free rate increases the value of call options and decreases the value of put options, so it should be positive for calls and negative for puts.

Which of the Following Is/are False A) I and III Only B) II and IV Only

Which of the Following Is/are False A) I and III Only
B) II and IV Only