Select an option above to see an explanation here.

A) This answer is incorrect because the time value is not equal to the intrinsic value, and it decreases as the option nears expiration.
B) This answer is incorrect because the time value is not less than the intrinsic value, and it does not remain constant as the option nears expiration.
C) Time value represents potential profit in an options contract, but its erosion due to time decay reduces this potential as the option nears expiration.
D) This answer is incorrect because the time value is not equal to the intrinsic value, and it does not decrease due to increased chances of the option moving into the money.