Theta measures an option's:
A)intrinsic value.
B)volatility.
C)rate of time decay.
D)sensitivity to changes in the value of the underlying asset.
E)sensitivity to risk-free rate changes.

Name: Theta measures an option's: A)intrinsic value. B)volatility. C)rate of time decay. D)sensitivity to changes in the value of the underlying asset. E)sensitivity to risk-free rate changes.
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Question

Quizplus · Accepted Answer

Theta measures the rate of time decay of an option, which is the decrease in the value of an option as time passes.

Theta Measures an Option's