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Basic Question 0 of 12
Which of the following statements is not true?
B. An option is the right to buy or sell an underlying asset at the strike price.
C. Exercising an option involves buying or selling some asset.
D. The option price is the price paid to acquire the option.
A. After the expiration date the option becomes valuable.
B. An option is the right to buy or sell an underlying asset at the strike price.
C. Exercising an option involves buying or selling some asset.
D. The option price is the price paid to acquire the option.
User Contributed Comments 3
| User | Comment |
|---|---|
| gweiden | It's worthless at expiration. |
| johnowens | not true, gweiden. it's worth at expiration is its excersise value. if you have a call option to buy a stock at $20, which is trading at $30, then on expiration date its worth $10 per share. "After Expiration", it is no longer excersisable, so it is worthless. |
| johntan1979 | johnowens is right. It is worthless AFTER expiration, not ON or BEFORE. |
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Learning Outcome Statements
describe general principles of expense recognition, specific expense recognition applications, implications of expense recognition choices for financial analysis and contrast costs that are capitalized versus those that are expensed in the period in which they are incurred
CFA® 2025 Level I Curriculum, Volume 2, Module 2.