The time value of the option should:
A. approach infinity at expiration.
B. increase the longer the time to expiration.
C. decrease the longer the time to expiration.
D. not change with time to expiration.
Answer: B
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Quantity of Frozen Latte-On-A-Stick SuppliedPriceFlo's SupplyRita's Supply10020334649951512
Refer to Table 4.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, if the market quantity supplied is 18, the price must be:
A. $2. B. $3. C. $4. D. $5.