Before expiration, the time value of an in-the-money call option is always
A)equal to zero.
B)positive.
C)negative.
D)equal to the stock price minus the exercise price.

Question

Quizplus · Accepted Answer

The time value of an in-the-money call option is the difference between its market price and its intrinsic value, which is the difference between the current stock price and the exercise price. Since an in-the-money call has intrinsic value, its time value must be positive.

Before Expiration, the Time Value of an In-The-Money Call Option