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7#
发表于 2012-4-1 09:55
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What is the primary difference between an American and a European option? A)
| The American option can be exercised at anytime on or before its expiration date. |
| B)
| American and European options are never written on the same underlying asset. |
| C)
| The European option can only be traded on overseas markets. |
|
American and European options are virtually identical, except exercising the European option is limited to its expiration date only. The American option can be exercised at anytime on or before its expiration date. For the exam, the key concept relating to this difference is the value of the American option must be equal or greater than the value of the corresponding European option, all else being equal. |
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