The formula C₀= (S₀ + E) if (S₀ + E) = 0 correctly describe the boundary values for an American call option.

Question

The formula C₀>= (S₀ + E) if (S₀ + E) >= 0 correctly describe the boundary values for an American call option.

Quizplus · Accepted Answer

The formula provided does not correctly describe the boundary values for an American call option. The boundary conditions for an American call option are typically related to the intrinsic value of the option and the price of the underlying asset, not represented by the formula given.

The Formula C0 >= (S0 + E) If (S0

The Formula C₀>= (S₀ + E) If (S₀