At Expiration, the Time Value of an Option

question 49

Multiple Choice

At expiration, the time value of an option:

• A) is equal to the intrinsic value.
• B) is greater than the intrinsic value.
• C) is zero.
• D) is less than the intrinsic value.

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Definitions:

Actual Level

The real, measured level of production, performance, or activity, as opposed to planned or theoretical levels.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular category or period, indicating over or under spending.

Planning Budget

A financial plan that estimates the revenue and expenses for a specific period, often used for setting performance expectations.

Revenue and Spending Variance

The difference between the budgeted and actual amounts of revenue and expenditure over a specific period.