The formula C0 = S0 correctly describes the boundary values for an American call option.

Name: The formula C0 = S0 correctly describes the boundary values for an American call option.
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Question

Quizplus · Accepted Answer

The boundary condition C0 = S0 for an American call option indicates that the option's value at expiration is equal to the stock price if the option is exercised, which is a characteristic of American options allowing early exercise.

The Formula C0 = S0 Correctly Describes the Boundary Values