What Impact Does Each Of The Following Call Option Parameters

What impact does each of the following call option parameters have on the value of a call option?

1.Current Stock Price

2.Exercise Price

3.Option’s Term to Maturity

4.Risk-Free Rate

5.Variability of the Stock Price

Why is corporate finance important to all managers?


Assume that you have just been hired as a financial analyst by Triple Trice Inc., a mid-sized California company that specializes in creating exotic clothing. Since no one at Triple Trice is familiar with the basics of financial options, you have been asked to prepare a brief report that the firm’s executives could use to gain at least a cursory understanding of the topic. To begin, you gathered some outside materials the subject and used these materials to draft a list of pertinent questions that need to be answered. In fact, one possible approach to the paper is to use a question-and-answer format. Now that the questions have been drafted, you have to develop the answers.
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