Which one of the following defines the relationship between the value of an option and the option's time to expiration?
A)theta.
B)vega.
C)rho.
D)delta.
E)gamma.

Question

Quizplus · Accepted Answer

Theta is the Greek letter that represents the time decay of an option. As time to expiration decreases, the value of the option decreases as well. Therefore, theta is the measure of the relationship between the value of an option and the option's time to expiration.

Which One of the Following Defines the Relationship Between the Value