Other Things Equal,after an Option First Becomes Available in the Market

question 27

Multiple Choice

Other things equal,after an option first becomes available in the market,

• A)its time value approaches zero.
• B)its time value increases into maturity.
• C)the volatility of the stock is negatively related to the value of the call.
• D)if it is out of the money,it will have no time value.

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Definitions:

Adjusting

The process of adapting or becoming accustomed to a new situation or environment.

Piagetian Terms

Concepts and terminology associated with the cognitive developmental theory of Swiss psychologist Jean Piaget, which focuses on how children's thinking evolves over time.

Accommodation

The process of adjusting or adapting cognitive schemas to integrate new information, or physical provisions made for housing.

Organization

The structured arrangement of components, applicable to entities ranging from businesses to biological systems, to achieve specific goals or functions.