Which of the Following Is True for a One-Year Call

question 16

Multiple Choice

Which of the following is true for a one-year call option on a stock that pays dividends every three months?

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

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Definitions:

Coordinating Conjunction

A coordinating conjunction is a word used in grammar to connect words, phrases, or clauses that are equally important or similar in structure.

Punctuated Correctly

Ensuring text follows standard rules of punctuation for clarity, readability, and correctness in written communication.

Du Pont

An American conglomerate founded in 1802, known historically for its development and manufacturing of chemicals and products related to agriculture, electronics, industrial biosciences, and performance materials.

Coordinating Conjunction

A word used to connect clauses or sentences of equal rank, such as "and," "but," or "or."