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Given a Longer-Lived American Call and a Shorter-Lived American Call

Question 45

Multiple Choice

Given a longer-lived American call and a shorter-lived American call with the same terms,the longer-lived call must always be worth


A) at most the value of the shorter-lived call
B) at least as much as the shorter-lived call
C) exactly the same as the shorter-lived call
D) the shorter-lived call discounted to the length of the longer-lived call
E) none of the above

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