At expiration, the time value of an in-the-money call option is always
A) equal to zero.
B) positive.
C) negative.
D) equal to the stock price minus the exercise price.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

At expiration, the time value of an in-the-money call option is always equal to zero because its value is entirely determined by its intrinsic value, which is the difference between the stock price and the exercise price. Time value diminishes as the option approaches expiration.

At Expiration, the Time Value of an In-The-Money Call Option