Which one of the following statements related to options is correct?
A) American stock options can be exercised but not resold.
B) A European call is either equal to or less valuable than a comparable American call.
C) European puts can be resold but can never be exercised.
D) European options can be exercised on any dividend payment date.
E) American options are valued using the Black-Scholes option pricing model.

Question

Quizplus · Accepted Answer

A European call option can only be exercised at expiration, while an American call option can be exercised at any time up to expiration. This flexibility often makes the American call more valuable under the same conditions (e.g., same underlying asset, strike price, and expiration date).

Which One of the Following Statements Related to Options Is