The Time Value of an Option Is Equal To

Multiple Choice

The time value of an option is equal to:

A) The difference between the option's market price and its intrinsic value.
B) The difference between the option's intrinsic value and its market price.
C) The risk-free interest rate in the economy.
D) The net present value of the option's cash flows.
E) The net present value of the option's cash flows, discounted at the risk-free interest rate.