Before expiration,the time value of a call option is equal to
A)zero.
B)the actual call price minus the intrinsic value of the call.
C)the intrinsic value of the call.
D)the actual call price plus the intrinsic value of the call.
E)none of the above.

Question

Quizplus · Accepted Answer

Before expiration, the time value of the option decreases gradually and approaches zero. Therefore, the actual call price minus the intrinsic value of the call represents the time value of the option.

Before Expiration,the Time Value of a Call Option Is Equal