Time value
Time value is, as above, thedifference between option value and intrinsic value, i.e.
Time Value = Option Value - Intrinsic Value.
More specifically, an option's time value reflects the probability that the option will gain in intrinsic value or become profitable to exercise before it expires. An important factor is the option's volatility. Volatile prices ofthe underlying in
the obligation, to sell the underlying asset at a certain date for a certain price. Only a little extra work is needed to value put options. Basically , we just pretend that a put option is a call option and use the Black-Scholes formula to value it. We then use the put-call parity condition to solve for the put value. Put-call parity requires that
Put Option+Stock Price=Call Option+PV of Exerci
the elemental composition ofthe combustible fraction (volatile
matter
and
fixed
carbon)
in
a
fuel.
This
does
not
include
the
moisture
which
is
determined
by
the
proximate
analysis.
Table
1
shows
the
typical
values
of
moisture,
carbon, hydrogen and oxygen contents for wood and different ranks of
the maturity on July 20th, 2012. We collected the ask and bid price and set mid price ofthethem as market price. Second, we collected the risk-free rate 0.07% which is the 3-month US Treasury bond rate. To be more accurate we need 2-month US Treasury bond rate, but there is no 2-month US Treasury bond. Thus, rather than adjusting rate to 2-month sloppily, assuming there is no significant differ
the figures is the worst industrial output growth in three years. Risks are being cited that would lead to the lowest full year growth rate for the economy in two decades.
Russia and Brazil, the two commodity exporters, are no different in their woes. Russia is the world's second largest oil producer, and recently suffered from declining oil exports and capital flight. With the threat ofthe eur