- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 8. Pricing and Valuation of Options
- Subject 3. Factors Affecting Option Value
CFA Practice Question
The owner of a ______ option anticipates the underlying security to ______ in terms of value.
II. put; decrease
III. call; increase
IV. call; decrease
I. put; increase
II. put; decrease
III. call; increase
IV. call; decrease
Correct Answer: II and III
A put holder expects stock prices to decline while a call holder expects stock prices to rise.
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