An American Call on a Non-Dividend Paying Stock Will Be

question 12

True/False

An American call on a non-dividend paying stock will be worth more than a European call on that same stock.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, clearing the market.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the point where the supply and demand curves intersect.

Quantity Demanded

The amount of a good or service that consumers are willing and able to buy at a given price.

Price

The monetary value assigned to a product or service, indicating how much a buyer must pay to acquire it.