The Value of an Otherwise Identical American Call Option Is

question 5

Multiple Choice

The value of an otherwise identical American call option is ________ if the exercise date is ________.

• A) higher, longer
• B) lower, longer
• C) higher, closer
• D) none of the above

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Definitions:

Atm

Atmospheric pressure, a unit of measurement representing the pressure exerted by the Earth's atmosphere at sea level.

Container

Any item that can hold materials, products, or substances, preventing their escape or entry of others.

Compressed

Reduced in volume as a result of applied pressure.

Atm

Standard atmosphere, a unit of pressure defined as 101,325 Pa; commonly used as a reference pressure in physics and meteorology.