Q547
Time value of an option is added into intrinsic value to calculate
A.
market index of an option
B.
depreciated value of option
C.
appreciated value of option
D.
price of an option
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Time value of an option is added into intrinsic value to calculate price of an option. The price of an option, called the premium, is composed of a number of variables. Options traders need to be aware of these variables so they can make an informed decision about when to trade an option.