Calculate the price of a call option

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Reference no: EM133080106

1) According to the capital asset pricing model (CAPM) the return of a given security will be most closely correlated with

a. its variance

b. its covariance with the market

c. its degree of liquidity d. its delta

e. its gamma

2) The price of a call option would tend to fall when

a. volatility of the base stock rises

b. time to expiration increases

c. the underlying stock price rises

d. market interest rates fall

e. the strike of that call falls.

Reference no: EM133080106

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