Sản phẩm & Rủi roCâu 91 / 398
An option premium is composed of:
a.Intrinsic value only
b.Time value only
c.Strike price plus dividends
d.Intrinsic value plus time value
Giải thích
An option's premium equals its intrinsic value (the amount by which it is in-the-money) plus its time value (the extra amount reflecting the time remaining until expiration and volatility). An out-of-the-money option has zero intrinsic value, so its entire premium is time value, which erodes as expiration approaches.
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Câu hỏi liên quan cùng chủ đề
- A call option with a strike price of $50 is held while the underlying stock trades at $57. This call is:
- A put option with a strike price of $40 is held while the underlying stock trades at $45. This put is:
- When the market price of the underlying stock exactly equals the strike price, both a call and a put on that stock are said to be:
- An investor owns 100 shares of a stock and sells one call option against those shares. This strategy is:
- An investor holds a long stock position and buys a put on that stock to limit downside risk. This is known as:
- What is the maximum loss for the buyer of a call option?
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