Prepare a table like Table 16.1 for the determinants of put option values. How should put values respond to increases in S, X, T, σ, r_f, and dividend payout?

Transcribed Image Text:

TABLE 16.1 Determinants of call option values If This Variable Increases Stock price, S Exercise price, X Volatility, o Time to expiration, T Interest rate, rf Dividend payouts The Value of a Call Option Increases Decreases Increases Increases Increases Decreases