Explanation:

Implied volatility is not a contract specification. It is a market-derived estimate used in option pricing and analysis, not a term written into the option contract.

By contrast:

Strike prices are contract terms.
Underlying: 100 shares is standard for an equity option contract.
Exercise style: American is a valid contract feature.

Therefore, the incorrect choice is C.

Q-607.2. Robert purchases an equity option on a major trading exchange when the underlying share price is `$96.00`. Each of the following specifications is a plausible entry in the option contract EXCEPT which is not a contract specification or element?

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Last updated: April 18, 2026 at 11:32

Strike prices of $90.00, $95.00 or $100.00

33.3%

Underlying: 100 shares of the equity security

33.3%

Implied volatility: limited to 25.00% or the average of last twenty trading days

33.3%

Exercise style: American; may be exercised on any business day up to and including on the expiration date

Financial Risk Manager Part 1

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Q-607.2. Robert purchases an equity option on a major trading exchange when the underlying share price is `$96.00`. Each of the following specifications is a plausible entry in the option contract EXCEPT which is not a contract specification or element?

Financial Risk Manager Part 1

Get started today

Get started today

Comments (0)

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Q-607.2. Robert purchases an equity option on a major trading exchange when the underlying share price is $96.00. Each of the following specifications is a plausible entry in the option contract EXCEPT which is not a contract specification or element?

Q-607.2. Robert purchases an equity option on a major trading exchange when the underlying share price is `$96.00`. Each of the following specifications is a plausible entry in the option contract EXCEPT which is not a contract specification or element?