The time value of an option is most accurateyl described as being greatest at the options exp. being typically greater than the options intrinsic value the entire premium for an out of the money option the amount by which the intrinsic value exceeds the option premium
D is correct. That’s the definition of Time value. Time Value = Option Value (determined by Black scholes formula) - Intrinsic value (e.g. call 0, Max S-K) A- is wrong its approaching 0 at expiration
c is correct. is the entire premiun of an out of money option. there is no intrinsic value here so the entire premuim is equal to time value.
I’d go for C
Yes C. D is the wrong way round: “the amount by which the intrinsic value exceeds the option premium” it should be the amount the “option premium excedes intrinsic value”
I said D as well… C it is though.