Using the Black-Scholes model to value a call option shows that when the other four variables are held fixed, the option price will be higher if the
A) price of the stock rises.
B) time to maturity is shorter.
C) exercise price is higher.
D) riskfree rate is lower.

Question

Quizplus · Accepted Answer

According to the Black-Scholes model, when all other variables are held constant, the price of a call option will increase with an increase in the stock price.

Using the Black-Scholes Model to Value a Call Option Shows