- 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
If you own a deep-in-the-money call option on non-dividend-paying stock, you will MOST LIKELY NOT to ______.
B. keep the option until later to see if the stock price will go up further
C. exercise the option
A. sell the option
B. keep the option until later to see if the stock price will go up further
C. exercise the option
Correct Answer: C
If you don't believe the stock price will go up anymore, you should sell the option instead of paying for the stock by exercising the option.
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