## Time to Expiration/Maturity

Time to Expiration/Maturity
It is very evident from the right part of Equation 5.10, that the higher is the value of t, the lower will be the present value of exercise price (to be paid in future year 0. Since this amount is to be subtracted from S to determine C it obviously implies the higher value of call option assuming other, things remain constant. In Example 5.5, let us assume time to expiration of 2 year