Selling an option is generally more valuable than exercising the option because of the option's:
A)riskless value.
B)intrinsic value.
C)standard deviation.
D)exercise price.
E)time premium.

Question

Quizplus · Accepted Answer

Selling an option generates income from the time premium, which is the amount of money the buyer pays for the right to exercise the option at a later date. Exercising the option would only result in receiving the intrinsic value (the difference between the current stock price and the exercise price). Therefore, selling the option is generally more valuable than exercising it.

Selling an Option Is Generally More Valuable Than Exercising the Option