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John Paulson is a portfolio manager with TechPlus Investments, a U . S . - based financial asset management firm. John is considering using options
John Paulson is a portfolio manager with TechPlus Investments, a USbased financial asset management firm. John is considering
using options to enhance portfolio returns and control risk. He asks his junior analyst, Tommy Hilfiger, to help him. Hilfiger collected
and summarize the relationship between a European option and various factors that might impact the call option value in the
following table.
Which of the relationships shown in the Table is incorrect? Choose the best answer Which of the relationships shown in the Table is incorrect? Choose the best answer
Volatility and Stock Price
I Riskfree rate and Volatility
Exercise price and stock price
Maturity and divedend
E Stock Price and Interest Rate
Maturity and interest rate
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