If the market is in equilibrium,then a call option contract must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

Question

Quizplus · Accepted Answer

The price of a call option depends on several factors such as the stock price, time to expiration, volatility, interest rates, and market demand. It is not solely determined by the difference between the stock's current price and the option's strike price. Therefore, even if the market is in equilibrium, a call option contract may not necessarily sell at a price exactly equal to the difference between the stock's current price and the option's strike price.

If the Market Is in Equilibrium,then a Call Option Contract