Time Value of Money
Imagine that a carton of Oregon Strawberry costs $10, and you invest $5 in a company that makes the produce. The investment yields and you capitalize this amount in a year.
The recognition that a dollar in the present is more valuable than a dollar in the future.
market value minus face value the premium at which an option is trading relative to its intrinsic value ...
Because an option grants the holder a right, it has value for the holder. It represents a liability for the issuer. Option valuation is any procedure for assigning a market value to an option.
The value of an option that captures the chance of further appreciation before expiration.
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Time value of an option
Definition: [crh] The portion of an option's premium that is based on the amount of time remaining until the expiration date of the Definition: ion+contract"option contract, ...
is, as above, the difference between option value and intrinsic value, i.e.
= Option Value - Intrinsic Value.
Time Value of Money - The concept that money today is worth more than the same amount in the future, when inflation has reduced its value.
of an Option
of an Option It is the part of the option's premium, which is based on the time remaining till expiry of the option's contract.
Time Value Of Money: Because money invested in a security or deposited in a savings account will earn income over time, there is a value placed on the use of money for any given period.
- The part of the option premium derived from the volatility and the time remaining until expiration. It is the part of the option premium that is NOT the intrinsic value.
The portion of an option's value imputed to the possibility that the price of the underlying will move in the option holder's favor during the time remaining before the option expires.
times interest earned ...
The of money is the rate at which the value of money is traded off as a function of time.
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar in the hand today can earn INTEREST during the time until the future dollar is received.
Tobin, James ...
of money - This relates to the concept that one $ a person has today is worth more than a $ that a person has tomorrow.
Time value of money
The potential of an investment to increase in value through periodically compounded earnings.
An amount paid for a service beyond what’s required, usually to express satisfaction; also known as a gratuity.
This is the sum of money that an option's premium surpasses its intrinsic worth, and is also called as 'time premium'.
Times Interest Earned ...
Time Value or Extrinsic Value The amount that the current market price of a right, warrant or option exceeds its intrinsic value.
The of money is money's potential to grow in value over time. Because of this potential, money that's available in the present is considered more valuable than the same amount in the future.
Time value of money
Investments generate cash flow to the investor to compensate the investor for the time value of money.
of an option
The portion of an option's premium that is based on the amount of time remaining until the expiration date of the option contract, ...
The amount of an option premium that exceeds the intrinsic value of an in-the-money option. A call option with a strike price of 30, for example, has a premium of 3.
- 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.
A phrase used in relation to options. Time value is any portion of the option premium over an above the intrinsic value.
or Extrinsic ValueExpand/Collapse
The amount that the current market price of a right, warrant or option exceeds its intrinsic value.
The time value of money
The risk free rate of return, risk premia and yield spread
NPV and DCF valuation
Dividend yield and flat yield.
Internal rate of return and yield to maturity
Also called , the amount by which the option price exceeds its intrinsic value.
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Also known as time value. Extrinsic value is the price of an option minus its intrinsic value. As out of the money options have no intrinsic value, their option premium is based entirely on extrinsic value.
Fair Value or Theoretical Value ...
Compounding the of money for separate time intervals.
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Personal Finance Glossary ...
The concept that money now is worth more than money in the future, because money now can earn a return by being lent out. In valuing compani...(Read more)
Timely Execution ...
A measure of the of money that fully reflects the effects of compounding.
The gross underwriting spread adjusted for the impact of the announcement of the common
stock offering on the firm's share price.
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including of money considerations.
Claimant A party to an explicit or implicit contract.
Clean opinion An auditor's opinion reflecting an unqualified acceptance of a company's financial statements.
Payables Related: Accounts payable Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
City code on takeovers and mergersSee: Dawn raid Claim dilutionA decrease in the likelihood that one or more of a firm's claimants will be fully repaid, including of money considerations.
Claim dilution A reduction in the likelihood one or more of the firm's claimants will be fully repaid, including time value of money considerations. Claimant A party to an explicit or implicit contract.
Payback The length of time it takes to recover the initial cost of a project, without regard to the of money. Paydown In a Treasury refunding, the amount by which the par value of the securities maturing exceeds that of those sold.
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This financial instrument incorporates the of money into the ceding process such that the CEDENT can reinsure its liabilities at a premium rate less than the true rate for the liabilities transferred (difference in the two rates to be ...
See also: Time value of money, Index, Transaction, Banks, Values