The Longer the Time to Expiration, the Lower the Option

question 117

True/False

The longer the time to expiration, the lower the option time premium tends to be.

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Definitions:

Correlational Approach

A research strategy that involves observing and measuring the relationship between two or more variables without manipulating them.

Imply Causation

To suggest that one event is the result of the occurrence of another event without direct evidence, often confused with correlation.

Third Variable

A factor, often unmeasured, that can be the true cause behind the observed relationship between two variables.

Correlational Method

Research in which two or more variables are measured and compared to determine to what extent, if any, they are associated.