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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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Colin Sampaleanu
Learning Outcome Statements
identify assumptions of the Black-Scholes-Merton option valuation model;
interpret the components of the Black-Scholes-Merton model as applied to call options in terms of a leveraged position in the underlying;
describe how the Black-Scholes-Merton model is used to value European options on equities and currencies;
CFA® 2025 Level II Curriculum, Volume 5, Module 32.