CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Which type of put options on dividend-paying stock are worth more?
A. American-style put options may be worth more.
B. European-style call options may be worth more.
C. Either A or B can be true. They may worth the same.
Explanation: The benefit (investing the proceeds to get risk-free return from proceeds) may be bigger than the cost (exercise the option and lose the dividend), so early exercise may have value.

User Contributed Comments 1

User Comment
niuniucow European option can never worth more than American option, so B and C are wrong.
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