CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Which type of call options on dividend-paying stock are worth more?
A. American-style call options
B. European-style call options
C. They are worth the same.
Explanation: The holder of a call option in the money on a dividend-paying stock may decide to exercise the option early to receive the dividend amount. The right to exercise early has value.

User Contributed Comments 2

User Comment
madjoffm For sure, the american call would be more worth due to the inherent options of exercizing daily.
ibrahim18 wrong @madjoffm. You only excercise european options at expiration, but you can exercise american options early.
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