Level 5: mixed practice
Each question is one of the five skills of Level 5: time value, put-call parity, a bound on an option’s price, a spread, or a straddle, strangle, strip or strap. As in an exam, you also have to choose the right method. You master the skill when you get three right in a row, with at least one right answer for each of the five.
Mixed practice:
After a wrong answer, the lesson for it is one click away: intrinsic value and time value, put-call parity, bounds on option prices, spreads and straddles, strangles, strips and straps.
Concept check: true or false
Exams also ask about ideas, with no numbers. Decide whether each statement is true or false, and you will see why after each answer.