For a Given Call Option Price, Which of the Following

question 104

Multiple Choice

For a given call option price, which of the following statements is correct?

• A) The closer the strike price is to the current price of the underlying asset, the smaller the time value of the option.
• B) The closer the strike price is to the current price of the underlying asset, the larger is the time value of the option.
• C) As the strike price approaches the price of the underlying asset, the time value of the option approaches zero.
• D) As the strike price approaches the price of the underlying asset, the intrinsic value of the option increases and the time value of the option decreases.

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Definitions:

Input Field Devices

Devices such as sensors, switches, and buttons that provide data or signals to control systems, usually as part of an automated or computerized system.

Grounding Procedures

The methods and practices used to connect electrical systems or equipment to the earth to ensure safety and prevent static or interference.

Low-impedance Ground

A grounding method or system that has a very low electrical resistance path to the earth to ensure safety and reduce the risk of electrical shock or fire.