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Basic Question 0 of 3
An American option is more valuable than a European option on the same dividend-paying stock with the same terms because the ______
B. American option can be exercised from the date of purchase until expiration but the European option can be exercised only at expiration.
C. European option does not conform to the Black-Scholes model and is often mispriced.
D. American options are traded on U.S. exchanges, offering much more volume and liquidity.
A. European option contract is not adjusted for stock splits and stock dividends.
B. American option can be exercised from the date of purchase until expiration but the European option can be exercised only at expiration.
C. European option does not conform to the Black-Scholes model and is often mispriced.
D. American options are traded on U.S. exchanges, offering much more volume and liquidity.
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Learning Outcome Statements
describe types of investors and distinctive characteristics and needs of each
describe defined contribution and defined benefit pension plans
CFA® 2025 Level I Curriculum, Volume 6, Module 3.