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Problem:

Consider the six influences on call and put options valuation - asset price, exercise or strike price, time to expiration, risk free rate of return, dividend or income yield, and asset volatility. Which of the six, when increasing, raises the market price of a call option on the same asset and which, when increasing, decreases this call's market price? Which of the six, when increasing, raises the market price of a put option on the same asset and which, when increasing, decreases this put's market price? Please provide all computation and formulas.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91145864

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