When an American Call Has Been Exercised Early,which of the Following

question 14

Multiple Choice

When an American call has been exercised early,which of the following inferences about the stock and option is valid?

• A)The stock must pay dividends after the date of exercise.
• B)The intrinsic value of the option is positive.
• C)The time value of the option is negative.
• D)All of the above.

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Definitions:

Underlying Purposes

Fundamental reasons or motives behind actions or decisions, often not immediately apparent.

Negative Elements

Components or aspects of a situation, proposal, or environment that are harmful or undesirable.

Informative Message

A communication that aims to enlighten or inform the recipient about specific facts or details.

Order of Importance

A method of organizing information or arguments by arranging them from the most significant to the least significant or vice versa.