- 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
Which factor is DIRECTLY related to the value of a European call option?
B. Risk-free rate of interest
C. Payments of the underlying
A. The exercise price
B. Risk-free rate of interest
C. Payments of the underlying
Correct Answer: B
The call option holder continues to earn interest on the money that could be expended later in paying the exercise price upon exercise of the option.
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