Consider an American and a European Call Option on a Dividend-Paying

question 32

Multiple Choice

Consider an American and a European call option on a dividend-paying stock, with otherwise identical features (same strike price, etc.) . Which one of the following statements is true?

• A) The American call option will never be worth less than the European call option.
• B) The European call option will never be worth less than the American call option.
• C) Both options should always have the same value.
• D) None of the above statements is true.

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