Chapter 03 · Section 3.1

The Time Value of an Option

At maturity, the time value of an option (put or call) is equal to:

• a) the intrinsic value.
  No. The time value can only equal the intrinsic value by chance. Try to remember the components of the time value and think about their influence on the premium at maturity.
  b) zero.
  c) the premium.
  d) None of the above.

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