Question: 1) Two components that make up option value are intrinsic value and time value. Explain why the intrinsic value of an option is always non-negative,

1) Two components that make up option value are intrinsic value and time value. Explain why the intrinsic value of an option is always non-negative, even for out of the money option. Explain why the time value of an option is positively correlated with its time to maturity.

2) Short selling is bad for the equity market but shorting is good for the futures market. Do you agree with this statement? Give your opinion.

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