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Basic Question 2 of 9

The effect of dividends on a stock with an American call is to ______.

A. make early exercise less likely
B. have no effect on early exercise
C. make early exercise more likely

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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

calculate the no-arbitrage values of European and American options using a two-period binomial model;

identify an arbitrage opportunity involving options and describe the related arbitrage;

CFA® 2025 Level II Curriculum, Volume 5, Module 32.