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Basic Question 10 of 32

The volatility surface should be ______ in theory. In practice it is ______.

A. flat; flat
B. flat; non-flat
C. non-flat; flat

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Craig Baugh

Craig Baugh

Learning Outcome Statements

interpret each of the option Greeks;

describe how a delta hedge is executed;

describe the role of gamma risk in options trading;

define implied volatility and explain how it is used in options trading.

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