- CFA Exams
- CFA Exam: Level II 2021
- Study Session 14. Derivatives
- Reading 38. Valuation of Contingent Claims
- Subject 6. Option Greeks and Implied Volatility

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**CFA Practice Question**

The ______ is a two-dimensional plot of the implied volatility with respect to the exercise price.

B. volatility surface

C. volatility fear

A. volatility smile

B. volatility surface

C. volatility fear

Correct Answer: A

The volatility surface is a three-dimensional plot of the implied volatility with respect to both expiration time and exercise prices.

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