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Basic Question 4 of 11

The lower bound on a European call price is the greater of zero and ______.

A. the underlying price minus the exercise price
B. the present value of the exercise price minus the underlying price
C. the underlying price minus the present value of the exercise price

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

contrast the use of arbitrage and replication concepts in pricing forward commitments and contingent claims

CFA® 2024 Level I Curriculum, Volume 5, Module 8.