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The Time Value of an Option Is the Difference Between

Question 28

Multiple Choice

The time value of an option is the difference between ________.Because a(n) ________ option cannot be worth less than its intrinsic value,it cannot have a negative time value.


A) the current option price and its intrinsic value; American
B) the current option price and its intrinsic value; European
C) the current option price and its present value; American
D) the current option price and its present value; European

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