Multiple Choice
Consider two identical European call options on two identical stocks A and B,except that the former stock pays dividends and the latter stock does not.Which of the following statements is most valid?
A) Call A is greater in value than call B.
B) The time value of call A is greater than that of call b.
C) The time value of call B is greater than that of call A.
D) The insurance value of call B is greater than that of call A.
Correct Answer:
Verified
Correct Answer:
Verified
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