The difference between an American call and a European call is that the American call:
A) has a fixed exercise price while the European exercise price can vary within a small range.
B) is a right to buy while a European call is an obligation to buy.
C) has an expiration date while the European call does not.
D) is written on 100 shares of the underlying security while the European call covers 1,000 shares.
E) can be exercised at any time up to the expiration date while the European call can only be exercised on the expiration datE.

Question

Quizplus · Accepted Answer

The main difference between an American call and a European call is their exercise style. An American call option can be exercised at any time before or on the expiration date, while a European call option can only be exercised on the expiration date. The other choices in the question are incorrect as they do not accurately describe the differences between American and European calls.

The Difference Between an American Call and a European Call