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Basic Question 8 of 14
Which factor is DIRECTLY related to the value of a European put option?
B. Risk-free rate of interest
C. Cost of carry
A. Volatility of the underlying
B. Risk-free rate of interest
C. Cost of carry
User Contributed Comments 2
| User | Comment |
|---|---|
| Ricey | Shouldn't it be B? higher risk-free rate results in lower put option value. |
| breh | @Ricey: A is just more directly related. |
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Andrea Schildbach
Learning Outcome Statements
identify the factors that determine the value of an option and describe how each factor affects the value of an option
CFA® 2025 Level I Curriculum, Volume 5, Module 8.