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Basic Question 11 of 12

As the carry benefits rise, it becomes ______ likely that the call option will expire out of the money.

A. more
B. less
C. The likelihood will remain the same

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Craig Baugh

Craig Baugh

Learning Outcome Statements

identify assumptions of the Black-Scholes-Merton option valuation model;

interpret the components of the Black-Scholes-Merton model as applied to call options in terms of a leveraged position in the underlying;

describe how the Black-Scholes-Merton model is used to value European options on equities and currencies;

CFA® 2025 Level II Curriculum, Volume 5, Module 32.