Business and Personal Finance Dictionary

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• TIME VALUE
  
  Has two general meanings. The first is the value or amount of a sum of money adjusted by an interest rate for a given time period. The second common usage is in the context of options. Here, it defines the amount of premium attributed to the remaining term of the option after factoring out any in-the-money component. Is multiplicative factor which is dependent on the time remaining to expiration and the attendant volatility. However, time value is not proportional but tends to more nearly approximate a square root function.
  
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