Page 167 - PRIAA Glossary

TIME VALUE
The amount by which the premium of an option exceeds its intrinsic value. Where an option has no intrinsic value, the premium consists entirely of time value.
TIMER OPTION
An option which is priced using a fixed volatility and has
a random maturity. A timer option is exercised when the cumulative volatility of the underlying asset reaches a predetermined threshold. Since the buyer is not exposed to the possibility of implied volatility overestimating realised volatility, a timer option has a low premium.
TIME-WEIGHTED RATE OF RETURN (TWRR)
Average return on investment, specifically controlling for the size and timing of contributions.
TOLLING AGREEMENT
An agreement between a producer of raw materials with another counterparty that has the facilities for processing them. The owner of the raw materials may or may not have the rights on the output. Commonly used in refining, smelting and power contracts.
TON-MILE
A measure equivalent to a number of tons of cargo moved a number of miles. For instance, a vessel carrying 30,000 tons over a distance of 1,000 miles would be equivalent to 30,000,000 ton-miles. This term is used to describe and forecast shipping activity.
TOTAL RETURN
The rate of return over a given evaluation period, specifically including interest, capital gains, dividends and realised distributions.
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