Before Expiration,the Time Value of a Call Option Is Equal

question 48

Multiple Choice

Before expiration,the time value of a call option is equal to

• A) zero.
• B) the actual call price minus the intrinsic value of the call.
• C) the intrinsic value of the call.
• D) the actual call price plus the intrinsic value of the call.
• E) none of these.

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Definitions:

Dependent

In statistics, it refers to a variable which is assumed to be influenced by one or more independent variables.

Random Phenomenon

A process or event that occurs in a manner that the outcome is unpredictable and, in some cases, follows a probability distribution.

Maryland Powerball

A lottery game available in Maryland, part of the multi-state Powerball lottery in the United States.

Independent Trials

Experiments or tests in which the outcomes are not affected by previous results, ensuring each trial is conducted under similar but independent conditions.