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Basic Question 1 of 1
A call option on interest rates will be in the money when the ______
B. exercise rate is higher than the futures rate.
C. futures rate is higher than the current spot rate.
A. current spot rate is higher than the exercise rate.
B. exercise rate is higher than the futures rate.
C. futures rate is higher than the current spot rate.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate and interpret the value of an interest rate option using a two-period binomial model;
CFA® 2025 Level II Curriculum, Volume 5, Module 32.