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

question 11

Multiple Choice

At expiration, the time value of an in-the-money call option is always

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

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Definitions:

Loan

Borrowed capital that is expected to be repaid with interest by the borrower to the lender at a future date.

Annual Payments

Payments made once a year for any form of obligation or financial product, such as loans, leases, or insurance premiums.

Annual Return

The percentage change in an investment's value over a year, including dividends and appreciation.

Investment

Assets purchased with the expectation that they will generate income in the future or appreciate in value.