A Stock That Pays No Dividends Has a Price of $40

Multiple Choice

A stock that pays no dividends has a price of $40. If the interest rate is zero, then which if the following statements is valid?

A) The three-month call is worth less than the two-month call.
B) The time value of the three-month call is the same as that of the two-month call.
C) The insurance value of the three-month call is the same as that of the two-month call.
D) The intrinsic value of the three-month call is less than that of the two-month call.