- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 46. Basics of Derivative Pricing and Valuation
- Subject 8. Factors that Affect the Value of an Option

###
**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.

###
**User Contributed Comments**
0

You need to log in first to add your comment.