How does the price of a call option respond to the following changes, other things equal? Does

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How does the price of a call option respond to the following changes, other things equal?

Does the call price go up or down?

a. Stock price increases.

b. Exercise price is increased.

c. Risk-free rate increases.

d. Expiration date of the option is extended.

e. Volatility of the stock price falls.

f. Time passes, so the options expiration date comes closer.

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Principles of Corporate Finance

ISBN: 978-0077404895

10th Edition

Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen

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