CFA Practice Question

There are 227 practice questions for this study session.

CFA Practice Question

True or false?

Investors in the one-period binomial model are assumed to be risk-averse.
Correct Answer: False

Essentially, option valuation here is via application of the risk neutrality assumption over the life of the option, as the price of the underlying instrument evolves.

User Contributed Comments 0

You need to log in first to add your comment.