The Difference Between an American Call and a European Call

question 6

Multiple Choice

The difference between an American call and a European call is that the American call

• A)has a fixed exercise price while the European exercise price can vary within a small range.
• B)is a right to buy while a European call is an obligation to buy.
• C)has an expiration date while the European call does not.
• D)can be exercised at any time up to and including the expiration date while the European call can only be exercised on the expiration date.
• E)is written on 100 shares of the underlying stock while the European call is based on 10 shares of the underlying stock.

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