Quiz Ch 16 – Components of Call Option Pricing
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What term represents the excess amount above intrinsic value found in the actual call price?
What term represents the excess amount above intrinsic value found in the actual call price?
What is the relationship between the price of a stock put option, the stock price, and the exercise price?
What is the consistent delta range for a call option on a stock?
What defines the intrinsic value of a call option?
How does a high dividend payout affect the values of call and put options?
What will happen to the value of Investor A’s call option and Investor B’s put option as stock price volatility increases assuming all else remains constant?
Which elements based on research, improve pricing accuracy in option-pricing models compared to the basic Black-Scholes model?
What is required to make a binomial option price closely match the Black Scholes price?
What is the value of a portfolio where you buy a call and simultaneously sell a put on the same stock, given that prices are at equilibrium?
Based on the provided information, what would you anticipate the hedge ratio to be for the call option?