- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 8. Pricing and Valuation of Options
- Subject 1. Option Exercise Value, Moneyness, and Time Value
CFA Practice Question
Kris takes a long position in a call option having an exercise price of $55.00 for $1.40. What will be the most likely value of the call option on the same underlying having an exercise price of $50.00?
B. $1.40
C. $0.70
A. $3.40
B. $1.40
C. $0.70
Correct Answer: A
The lower the exercise price; the higher is the value of the European call options.
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