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At expiration, the time value of an in-the-money call option is always A) positive B) none of the options are correct C) equal to the stock price minus the exercise price D) negative E) equal to zero
At expiration, the time value of an in-the-money call option is always
A) positive
B) none of the options are correct
C) equal to the stock price minus the exercise price
D) negative
E) equal to zero
Expert Solution
The difference between the actual option price and the intrinsic value is called the time value of the option.
At expiration the time value of of an in the money call option is always equal to zero.
So the correct answer is option. (E)equal to zero
All the other options are false.
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