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Extrinsic value is the portion of an option's price that is not due to its intrinsic value (the actual value of the underlying asset at that point in time). It is influenced by factors such as time until expiration, volatility of the underlying asset, and interest rates. High extrinsic value is typical of options with longer expiration dates or higher levels of implied volatility.

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Q: What is an extrinsic value?
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Continue Learning about Educational Theory

How do the predictions of self determination theory apply to intrinsic and extrinsic rewards?

Self-determination theory suggests that intrinsic motivation arises from internal factors like autonomy, competence, and relatedness, leading to sustained engagement in activities. Extrinsic rewards, on the other hand, may undermine intrinsic motivation if they control behavior. The theory highlights the importance of balancing intrinsic and extrinsic rewards to support individuals' autonomy and foster long-term motivation.


What is the difference between intrinsic and extrinsic feedback?

Intrinsic feedback comes from within the individual, such as sensory information or feelings generated during the task. Extrinsic feedback comes from external sources, such as a coach, teacher, or technology providing information or guidance on performance.


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Both intrinsic and extrinsic motivation can drive behavior. However, intrinsic motivation comes from within and is based on personal satisfaction or fulfillment, while extrinsic motivation comes from external rewards like money or praise. Both can influence performance and lead to goal achievement.


What is present value analysis?

Present value analysis is a financial technique used to evaluate the value of future cash flows by discounting them back to their current value. It takes into account the time value of money, allowing for better decision-making by comparing the present value of costs and benefits. The goal is to determine whether an investment or project is worth pursuing based on its potential return.


What type of learning style characterizes a person who is motivated to learn by external rewards and the desire to be viewed in a good light by others?

This type of learning style is typically associated with extrinsic motivation, where individuals are driven by external rewards such as praise, grades, or competition. They may be more focused on meeting others' expectations and seeking approval rather than on intrinsic motivation or personal interest in the subject matter.