Question
For a given call option price, which one of the following statements is correct? The closer the strike price is to the current price of
For a given call option price, which one of the following statements is correct?
The closer the strike price is to the current price of the underlying asset, the smaller is the time value of the option.
The closer the strike price is to the current price of the underlying asset, the larger is the time value of the option.
As the strike price approaches the price of the underlying asset, the time value of the option approaches zero.
As the strike price approaches the price of the underlying asset, the intrinsic value of the option increases and the time value of the option decreases.
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Venture Capital And The Finance Of Innovation
Authors: Andrew Metrick, Ayako Yasuda
3rd Edition
1119490111, 978-1119490111
