EFTA Document EFTA01353414

the same, options on more volatile interests command higher premiums than options on less volatile interests. Time value is also influenced by the current cost of money. Increases in prevailing interest rates tend to cause higher premiums for calls and lower premiums for puts, and decreases in prevailing interest rates tend to cause lower premiums for calls and higher premi- ums for puts. The following is a description of the terminology ap- plicable to capped options: CAP INTERVAL-The