The Buyer of an American Option Has Less Flexibility with Respect

question 294

True/False

The buyer of an American option has less flexibility with respect to the date of exercise than the buyer of an otherwise identical European option.

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Definitions:

Hornfels

A hard, fine-grained metamorphic rock formed by the contact metamorphism of clay-rich or silicate rocks.

Thrust Fault

A type of fault in which the upper block, above the fault plane, moves up and over the lower block.

Anticline

A type of fold in sedimentary rocks that resembles an arch, with the oldest rock layers at its core, indicative of compressional tectonic forces.

Syncline

a downward-curving (trough-like) fold in rock layers where the youngest materials are at the center.