Assignment:
Q1. Why do options sell at prices higher than their exercise values?
Q2. Describe the effect on a call option’s price caused by an increase in each of the following factors: (1) stock price, (2) exercise price, (3) time to expiration, (4) riskfree rate, and (5) variance of stock return.
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.