Consider an American and a European call option on a dividend-paying stock, with otherwise identical features (same strike price, etc.) . Which of the following statements is true?
A) The American call option will never be worth less than the European call option.
B) The European call option will never be worth less than the American call option.
C) Both European call and American call option should always have the same value.
D) The American option can be exercised only on specific dates during the life of the option.
Correct Answer:
Verified
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