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There Are Six Factors That Influence the Price of an Option

Question 26

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There are six factors that influence the price of an option: the current price of the underlying asset, the strike price, the time to expiration of the option, the expected price volatility of the underlying asset over the life of the option, the short-term, risk-free interest rate over the life of the option, and the anticipated cash payments on the underlying asset over the life of the option.

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