Question regarding american option
Explain why an American option is always worth at least as much as a European option on the same asset with the same strike price and exercise date.
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Explain why an American option is always worth at least as much as its intrinsic value.
Explain why the market maker's bid-offer spread represents a real cost to options investors.
What is a lower bound for the price of a 4-month call option on a nondividend-paying stock when the stock price is $28, the strike price is $25, and the risk-free interest rate is 8% per annum?
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