As an Option Approaches Its Expiration Date, the Value of the Option

question 59

Multiple Choice

As an option approaches its expiration date, the value of the option approaches:

• A) the intrinsic value.
• B) the price of the underlying asset.
• C) zero.
• D) infinity.

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Definitions:

Pay Ranges

A set of compensation levels that define the minimum and maximum amounts of pay an organization is willing to offer for specific positions or job categories.

Pay Differentials

The variations in pay for different jobs or skills within a company or in different geographical locations.

Fair Labor Standards Act

United States federal law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.

Minimum Wage

The lowest legal hourly pay that employers can compensate workers, established by law to ensure a minimum standard of living for employees.