By value they mean Intrinsic value or time value?

Q. If the risk-free rate increases, the value of an in-the-money European put option will most likely: A. decrease. B. remain the same. C. increase. Solution A is correct. An in-the-money European put option decreases in value with an increase in the risk-free rate. A higher risk-free rate reduces the present value of any proceeds received on exercise. Basics of Derivative Pricing and Valuation Learning Outcomes J. Explain the exercise value, time value, and moneyness of an option k. Identify the factors that determine the value of an option and explain how each factor affects the value of an option o. Explain under which circumstances the values of European and American options differ