alleryStart learning →A put has strike Rs 50, spot is Rs 42 and the premium is Rs 10. What is its time value?
ARs 8
BRs 2
CRs 10
DRs 18
Answer & Solution
Correct answer: B. Rs 2
Intrinsic value is 50 minus 42 = 8, so time value is the premium 10 minus 8 = Rs 2.
Keep practising Option (Finance)
Browse all Option (Finance) questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
When is charm especially useful for a delta-hedger?Which Greek is most important for an at-the-money straddle?Speed measures the change in gamma with respect to what?Which Greek is also known as vega convexity?Which Greek is called delta decay?Gamma is classed as which kind of Greek?Which Greek measures sensitivity to the interest rate?Which Greek measures the time decay of an option?