The time value of an option is equal to:
A) The difference between the option's market price and its intrinsic value.
B) The difference between the option's intrinsic value and its market price.
C) The risk-free interest rate in the economy.
D) The net present value of the option's cash flows.
E) The net present value of the option's cash flows, discounted at the risk-free interest rate.
Correct Answer:
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