- 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
Identify the factor(s) that affect(s) option prices but are not directly observable.
II. Interest rate
III. Volatility
IV. Time to expiration
I. Strike price
II. Interest rate
III. Volatility
IV. Time to expiration
Correct Answer: III
The other factors can be observed directly either in the option contract or in the market.
User Contributed Comments 4
| User | Comment |
|---|---|
| gill15 | Cant believe I got this wrong. |
| schweitzdm | Same here. |
| Inaganti6 | Volatility = sigma ? |
| khalifa92 | yup |