Start learning →

CA Final Option (Finance) — practice questions — page 3

Explore 69 free Option (Finance) questions in CA Final Strategicfinancialmanagement. Open each question or exercise to read its content, reference answers and available explanation.

Practise Option (Finance) with Quill →

Option (Finance) questions and exercises with answers

Showing questions 61–69 of 69.

What happens to call and put values when volatility rises?Read the answer and worked solution →Which Greek measures the time decay of an option?Read the answer and worked solution →Which Greek measures sensitivity to the interest rate?Read the answer and worked solution →Gamma is classed as which kind of Greek?Read the answer and worked solution →Which Greek is called delta decay?Read the answer and worked solution →Which Greek is also known as vega convexity?Read the answer and worked solution →Speed measures the change in gamma with respect to what?Read the answer and worked solution →Which Greek is most important for an at-the-money straddle?Read the answer and worked solution →When is charm especially useful for a delta-hedger?Read the answer and worked solution →

Worked practice questions

What happens to call and put values when volatility rises?

  1. Calls gain and puts lose
  2. Puts gain and calls lose
  3. Both calls and puts lose
  4. Both calls and puts gain
Show answer and solution

Correct answer: D. Both calls and puts gain

Higher volatility raises the chance of large favourable moves, so all options gain value.

Open this question →

Which Greek measures the time decay of an option?

  1. Theta
  2. Vega
  3. Rho
  4. Gamma
Show answer and solution

Correct answer: A. Theta

Theta measures how the option's value changes with the passage of time.

Open this question →

Which Greek measures sensitivity to the interest rate?

  1. Vega
  2. Rho
  3. Delta
  4. Charm
Show answer and solution

Correct answer: B. Rho

Rho is the derivative of the option value with respect to the risk-free interest rate.

Open this question →

How to practise

  1. Choose a Option (Finance) question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Strategicfinancialmanagement topics

Mergers Acquisitions and Corporate RestructuringBusiness ValuationCapital BudgetingForeign Exchange Exposure and Risk ManagementInterest Rate RiskModern Portfolio TheoryPortfolio ManagementValuation (Finance)