Fundamentals of Option Valuation

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following is the best definition for the term 'financial derivative?'

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1. What is true about a call option?

2. Which of these is not part of an options contract?

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About This Quiz & Worksheet

Use this worksheet and quiz to interact with what you know about option valuation. The quiz will test you on call options and other complex financial instruments.

Quiz & Worksheet Goals

This quiz and worksheet will get you to:

  • Identify a correct definition for financial derivative
  • Assess what is true about call options
  • Recognize what makes up an options contract
  • Explain the formula that helps to recall what goes into the price of an option
  • Determine the influence on the price of an option with regard to the time it is purchased until the strike date of the contract

Skills Practiced

This worksheet and quiz will allow you to practice the following skills:

  • Interpreting information - verify that you can read information regarding call options and interpret it correctly
  • Information recall - access the knowledge you've gained regarding financial derivatives
  • Knowledge application - use your knowledge to answer questions about option valuation

Additional Learning

This lesson will teach you more about this area of finance and investment. The lesson is called Fundamentals of Option Valuation and it will adhere to the following study guidelines:

  • Define derivatives
  • Understand what an underlying asset is
  • Identify different options
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