Which of the Following Is True When There Are Dividends

question 18

Multiple Choice

Which of the following is true when there are dividends

• A) It is never optimal to exercise a call option on the stock early
• B) It can be optimal to exercise a call option at any time
• C) It is only ever optimal to exercise a call option immediately after an ex-dividend date
• D) None of the above

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Definitions:

Liability

A legal responsibility or obligation, which can be in the form of debts or obligations arising from contracts, or as a result of violating laws and causing harm.

Appropriation

The act of setting aside funds for a specific purpose or the unauthorized use of someone's name, likeness, or work without permission.

Intrusion

An unauthorized entry or encroachment into someone else's property or personal affairs.

Defamation

The act of making false statements about another person, causing harm to their reputation.