alleryStart learning →As an option nears expiry, what happens to its time value?
AIt rises until expiry
BIt stays constant
CIt deteriorates steadily
DIt doubles each month
Answer & Solution
Correct answer: C. It deteriorates steadily
Time value erodes steadily toward expiry, leaving only intrinsic value.
Keep practising Ind AS 109 Financial Instruments
Browse all Ind AS 109 Financial Instruments questions for CA Final, or explore more Financialreporting topics.
Related questions
The 2009 IFRS 9 model for debt assets allowed which two approaches?IFRS 9 hedge documentation must describe what?How did IFRS 9 change hedge accounting for non-financial entities?What must an entity do to qualify for hedge accounting?Which exchange is noted for rice futures traded since the eighteenth century?Which portion of IFRS 9 did the IASB issue first, in 2009?Under the FASB CECL model, losses are recognised over what period from acquisition?A farmer sells wheat futures. Which risk does the farmer reduce?