Greater value of option, larger span of time value is usually results in__________?
Correct answer: B. Longer call option
- A. Shorter call option
- B. Longer call option
- C. Longer put option
- D. Shorter put option
Explanation
The time value of an option generally increases when more time remains before expiration, because there is a greater chance of a favourable price movement. The listed answer describes this as a longer call option.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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