Explain in simple terms why a call option on a non-dividend paying stock should never be exercised early
What will be an ideal response?
Answer:
The price of the American option will always exceed the intrinsic value, thus we would lose money exercising on American call prior to expiration, as opposed to selling the option.
Business
You might also like to view...
____________: leaders in social setting; slightly above average education
Fill in the blank(s) with the appropriate word(s).
Business
When computing standard error, if the variability (p times q) increases and the sample size remains the same, then the standard error:
A) decreases B) increases C) remains the same D) is about average E) none of the above; there is no such thing as standard error
Business