As an option approaches its expiration date, the value of the option approaches:
A)The intrinsic value.
B)The price of the underlying asset.
C)Zero.
D)Infinity.

Question

Quizplus · Accepted Answer

As an option approaches its expiration date, its time value decreases, and its value converges to its intrinsic value, which is the difference between the underlying asset's price and the option's strike price.

As an Option Approaches Its Expiration Date, the Value of the Option