CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

The higher the exercise price ______.
A. the higher the call price
B. the lower the call price
C. the higher the stock price

User Contributed Comments 7

User Comment
spowers Can someone explain?
samhoklee higher exercise price, decreases deviation from stock price, thus demand lower option premium.
moose1969 simpe example would be: A DEC $35 call will be cheaper than a DEC $10 call if the stock is trading @ $20.
mrvega Exercise price is relative to the underlying stock price.
chuong Intrinsic value of call option: C = max (0, S-X) therefore the higher X, the lower C
julamo Let's just keep it simple:

By definition, the "exercise price", or "strike price" for a CALL option is the price at which the underlying security can be purchased. If that price is high, the option becomes less attractive and loses in value... That's it
Lucho The buyer is willing to pay a lower price
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