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Basic Question 3 of 11
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 2
| User | Comment |
|---|---|
| Shaan23 | Thought A was false too but guess not. |
| schweitzdm | As did I. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
explain the exercise value, moneyness, and time value of an option
CFA® 2024 Level I Curriculum, Volume 5, Module 8.