Before Expiration, the Time Value of an At-The-Money Call Option

question 59

Multiple Choice

Before expiration, the time value of an at-the-money call option is always

• A)positive.
• B)equal to zero.
• C)negative.
• D)equal to the stock price minus the exercise price.
• E)None of the options

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Definitions:

Predominant Purpose

The main intent or objective behind a contract or transaction, often used to interpret the nature of the agreement.

Auto-parts Manager

A professional responsible for overseeing the operations and inventory of an auto-parts store or department.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise considered binding, not because of a formal contract, but because it was relied upon by another to their detriment.

Quasi-contract

A legal concept where a court imposes an obligation on a party to prevent unjust enrichment or unfair benefit at the expense of another, even if no actual contract exists.