- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 32. Valuation of Contingent Claims
- Subject 6. Option Greeks and Implied Volatility
CFA Practice Question
The ______ is a two-dimensional plot of the implied volatility with respect to the exercise price.
B. volatility surface
C. volatility fear
A. volatility smile
B. volatility surface
C. volatility fear
Correct Answer: A
The volatility surface is a three-dimensional plot of the implied volatility with respect to both expiration time and exercise prices.
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