SIE practice questionhardTime value
Which option will have the greatest time value, all else equal?
- AAn at-the-money option✓ Correct answer
- BA deep in-the-money option
- CA deep out-of-the-money option
- DAn option near expiration
Explanation
Why A — An 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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