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Basic Question 23 of 32
An investor believes that the stock price volatility of Amazon.com is about 33% implied volatility. A three-month at-the-money call on an Amazon.com option is being offered at 25% implied volatility. The investor should ______
B. sell the Amazon.com call.
C. wait as the option price is not quoted.
A. buy the Amazon.com call.
B. sell the Amazon.com call.
C. wait as the option price is not quoted.
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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
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.