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SIE: Options
SIE practice questionhardTime value

Which option will have the greatest time value, all else equal?

  1. AAn at-the-money option✓ Correct answer
  2. BA deep in-the-money option
  3. CA deep out-of-the-money option
  4. DAn option near expiration
Explanation

Why AAn at-the-money option

At-the-money options have the highest time value as price can swing either way. Deep ITM/OTM or near expiration options have little time value.

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