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____ [38]
3 years ago
13

Define option price. Explain why the option price of a policy might differ from the expected surplus generated by the policy.

Business
1 answer:
Nesterboy [21]3 years ago
8 0

Explanation:

Options prices, known as premiums, are composed of the sum of its intrinsic and time value. Intrinsic value is the price difference between the current stock price and the strike price. An option's time value or extrinsic value of an option is the amount of premium above its intrinsic value.

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Answer:

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