Value Vs Profit/Loss of an Option

CFA Level I Derivatives
#1

Hey guys,

In the Derivatives Section, when we are asked for the value of a derivative does this include the price of the option? I had thought that the value of an option was just the intrinsic value but when i did EOC questions 46 to 49 on page 457 in the derivatives book it included the price of the option. Any help would be appreciated. Thanks!

#2

There are several components of an option’s value, with the intrinsic value being just one of them.

#3

Over & above the intrinsic, comes time value (the possible probable profit that could be made on an option.)