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Option Values Increase with the Length of Time to Maturity

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Option values increase with the length of time to maturity. The expected change in the option premium from a small change in the time to expiration is termed delta.


Definitions:

Variation

The measurable difference between members of a population or set of data points.

Coefficient Of Correlation

An evaluative score indicating the intensity and directional path of a linear connection between two factors.

Variation

Variation refers to the degree to which data points in a dataset or population differ from each other and from the mean.

Dependent Variable

In an experiment or study, it is the variable that is being tested and measured, expected to change in response to alterations in the independent variable.

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