According to the Black and Scholes option pricing model,which of the following will lead to an increase in the value of a call option?

Question

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According to the Black and Scholes option pricing model, an increase in the risk-free rate will increase the value of a call option. This is because the higher the risk-free rate, the higher the opportunity cost of not investing in the risk-free asset, and the greater the potential benefit of using the call option to invest in the underlying asset. Decreases in the price of the underlying asset or time to expiration will decrease the value of the call option.

According to the Black and Scholes Option Pricing Model,which of the Following