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

Question

Quizplus · Accepted Answer

The time value of an at-the-money call option is positive because it reflects the potential for the option to gain in value before expiration due to changes in the underlying asset's price.

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