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.
b) the interest rate.
c) the difference between the premium and the intrinsic value.
• d) the exercise price.
  No. The exercise price is not the time value of the option.
  e) the volatility of the underlying asset.

(Click here for help)