# 8. Factors that Affect the Value of an Option

## k. identify the factors that determine the value of an option and explain how each factor affects the value of an option;

How is the lower bound of a European put constructed? The lower bound of a European put is established by constructing a portfolio consisting of a long put, a long position in the underlying, and the issuance of a zero-coupon bond.

(This section probably needs to be revisited in detail)

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CFA

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- 115.080.02 Derivatives - Reading 49 - Basics of Derivative Pricing and Valuation to 115.080.02.08 - Reading 49 - 8. Factors that Affect the Value of an Option