The value of an otherwise identical American call option is ________ if the exercise date is ________.
A)higher,longer
B)lower,longer
C)higher,closer
D)unchanged,closer
E)unchanged,longer

Question

Quizplus · Accepted Answer

The value of an American call option increases with the length of time until expiration because it provides the holder with more flexibility and time for the underlying asset to potentially increase in value, making the option more valuable.

The Value of an Otherwise Identical American Call Option Is