Which of the following is NOT valid about the time decay of European put and call options with the same strike and maturity?
A) The time decay is measured in dollars per unit time.
B) The call decays at the same rate as the put.
C) The call decays faster than the put.
D) The difference between the time decay of decay of the call and put depends on the moneyness of the options.

Question

Quizplus · Accepted Answer

Time decay, or theta, affects European put and call options differently due to their distinct payoff structures and the impact of interest rates and dividends. Therefore, they do not decay at the same rate.

Which of the Following Is NOT Valid About the Time