46. The value of a European option is least likely affected by:
the volatility of the underlying.
dividends or interest paid by the underlying.
the percentage of the investor’s assets invested in the option.
You must be logged in to post a comment.
47. Which of the following factors will least likely reduce the value of a European
Less time to expiration.
A higher stock price relative to the exercise price.
Larger dividends paid by the stock during the life of the option.
48. Analyst 1: A European put may be worthless the longer the time to
expiration because the cost of waiting to receive the exercise price is
Analyst 2: A European put may be worthless the longer the time to
expiration because the longer time to expiration means that that the put is
more likely to expire out-of-the-money.
Which analyst’s statement is most likely correct?
Neither of them
49. The value of a European put option on a dividend paying asset will most
likely decrease if there is a:
decrease in dividend payments.
decrease in carrying costs.
decrease in the risk free rate.
50. What is the most likely impact on the price of a call option if the risk-free
rate increases? The option price will:
stay the same.
UGC NET PAPER 1
UGC NET Management
UGC NET COMPUTER SCIENCE
UGC NET COMMERCE
GATE COMPUTER SCIENCE
CFA Level 1
Login with Facebook
Login with Google
Forgot your password?
Lost your password? Please enter your email address. You will receive mail with link to set new password.
Back to login