At 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.
E)none of the above.

Question

Quizplus · Accepted Answer

The time value of an option represents the premium paid for the option beyond its intrinsic value (the difference between the stock price and the exercise price). At expiration, there is no time left until expiration for the option to gain any additional time value, so it will only have intrinsic value. Therefore, the time value of an in the money call option will be zero at expiration.

At Expiration,the Time Value of an in the Money Call