- CFA Exams
- CFA Exam: Level I 2021
- Study Session 16. Derivatives
- Reading 49. Basics of Derivative Pricing and Valuation
- Subject 7. The Value of a European Option at Expiration
CFA Practice Question
Suppose an investor sells a put option. What will happen if the stock price on the exercise date exceeds the exercise price?
B. The seller will be obliged to buy stock from the owner of the option.
C. The owner will not exercise his option.
A. The seller will need to deliver stock to the owner of the option.
B. The seller will be obliged to buy stock from the owner of the option.
C. The owner will not exercise his option.
Correct Answer: C
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