An Option Is a Wasting Asset Because as Its Expiration

question 45

Multiple Choice

An option is a wasting asset because as its expiration date approaches, its:

• A) intrinsic value approaches zero.
• B) time value approaches zero.
• C) intrinsic value approaches its time value.
• D) price approaches zero.

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Definitions:

Conditional Sale Agreement

A contract for the sale of goods where the purchase price is paid in installments and the seller retains ownership of the goods until full payment is received.

Security

Measures or instruments (financial or physical) aimed at protecting assets, investments, or territories against loss, damage, or theft.

Provincial Personal Property

Assets and items of personal property as defined and regulated by provincial law in Canada.

Security Interest

Security interest is a legal claim on assets which are offered by a borrower to a lender as collateral for a loan or obligation.