The Divergence Between an Option's Intrinsic Value and Its Market

question 78

Multiple Choice

The divergence between an option's intrinsic value and its market value is usually greatest when ________.

• A) the option is deep in the money
• B) the option is approximately at the money
• C) the option is far out of the money
• D) time to expiration is very low

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Definitions:

Habit

A regular behavior or routine that is performed repeatedly and often automatically.

Creativity

The ability to produce ideas or problems to solutions that are unique, appropriate, and valuable.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

True Creativity

The ability to generate ideas or products that are both novel and valuable, reflecting genuine innovation.