Time Value Is Greatest (All Else Being Equal)for Options That

question 62

Multiple Choice

Time value is greatest (all else being equal) for options that are at-the-money because:

• A)a price increase may not deliver intrinsic value for out-of-the-money call options
• B)in-the-money options can lose intrinsic value
• C)at-the-money options best display the asymmetric payoff (win-but-not-lose)that makes options valuable
• D)a price fall may not deliver intrinsic value for out-of-the-money put options.
• E)All of these.