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.

Question

Quizplus · Accepted Answer

Exercising an American call early is typically done when the stock pays dividends, the intrinsic value is positive, and the time value is negative, making all options valid.

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