Chapter 03 · Section 3.1

The time value of an option

The time value of an option is:

• a) the time remaining in the option.
  No. The time remaining in the option is only one of the components of the time value.
  b) the interest rate.
  c) the difference between the premium and the intrinsic value.
  d) the exercise price.
  e) the volatility of the underlying asset.

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