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Basic Question 5 of 18
Which of the following statements about options and their underlying assets is FALSE?
B. The owner of the option is legally required to engage in a transaction involving the asset.
C. The holder of a long position on an option is the only party with the right to initiate a transaction involving the asset.
A. The value of an option, in comparison to its underlying asset, has the potential of creating an arbitrage opportunity.
B. The owner of the option is legally required to engage in a transaction involving the asset.
C. The holder of a long position on an option is the only party with the right to initiate a transaction involving the asset.
User Contributed Comments 4
| User | Comment |
|---|---|
| cgalarzac | Am I supposed to know the answer just by this reading? |
| fabsan | Same here |
| Olesya_CFA | these notes are supposed to supplement the main CFA readings or your experience. They are not sufficient for understanding all of the topics. I took a three months class to understand how options work. |
| Fabulous1 | Read the Derivatives Section first, then it will be easier if you have no prior knowledge of this topic |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
describe classifications of assets and markets
describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes
CFA® 2025 Level I Curriculum, Volume 3, Module 1.