Answer:
I) The difference between the option's price and the value it would have if it were expiring immediately
Explanation:
Time value in options trading simply refers to the part of an option's premium (cost or price) which is attributed to the amount of the time remaining until expiration.
An addition of the option's time value and intrinsic value equals the total premium of an option.
Therefore, we can mathematically state that:
Time Value = Option Premuim(Price) - Intrinsic Value.
The Option Premuim is an amount of money known as the price or cost.
In an exchange for the right granted by the option, an option buyer pays for the premium to an option seller.
Generally, it is seen that the more time that remains until the expiration, the greater the time value of the option. This happens as a result of investors willing to pay a higher premium for more time since the longer time taken to execute contract will be profitable due to a favorable move in the underlying asset.
Also, the lesser time remaining on an option will result in lesser willingness of investors to pay because the probability for profitability is slim.
The answer & explanation for this question is given in the attachment below.
Answer: False
Explanation:
The six sigma DMAIC approach for process improvement is a way of improving performance in such a way that it makes the company more profitable as well as improving customer relations and satisfaction.
The DMAIC is an acronym that stands for the the steps in the process as seen in the graph attached.
The above statement about Developing and Evaluating Solutions to make a company perform better is not the final step in the process as it falls under the fourth step, which is to Improve.
The final step is Control. Here the main focus is on preserving what has been achieved. It works by monitoring the situation and ensuring that the process improves if a loophole is spotted.
