Posted: May 27th, 2016

There are five factors that determine the value of an American call option.Explain how a change in each factor affects the option s value.

There are five factors that determine the value of an American call option. They are the price of the underlying asset, the strike price of the option, the time to expiration of the option, the volatility of the underlying asset and the interest rate. Explain how a change in each factor affects the option s value.