Chapter 03 · Section 3.1
The time value of an option
The time value of an option is:
e) the volatility of the underlying asset.
No. The volatility of the underlying asset has an influence on the time value but it is not the time value.
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.
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