CIMA Exam CIMAPRO19-P03-1 Topic 6 Question 68 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 68
Topic #: 6

[All CIMAPRO19-P03-1 Questions]

Which of the following will increase the value of a call option?

AAn increase in the strike price.

BAn increase in the time to expiry.

CA decrease in the volatility of the share.

DA decrease in the market value of the share.

Show Suggested Answer

Suggested Answer: B, E, F

by Yuette at May 17, 2024, 01:13 PM

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Alline

1 days ago

Hmm, let me think about this... An increase in the strike price would actually decrease the value of a call option, so that's not it. And a decrease in the market value of the share? That's just crazy talk. I'm going with B - gotta be the time to expiry.

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Curt

18 days ago

Aha, this is a classic options question! I'm pretty sure the answer is B - an increase in the time to expiry. The longer the option has until it expires, the more time it has to increase in value. Easy peasy!

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