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Difficulty: Hard
Category: Finance
Practice quant interview questions from top firms including Jane Street, Citadel, Two Sigma, DE Shaw, and other leading quantitative finance companies.
Topics: american-options, options-pricing, early-exercise, time-value
Under what conditions is it optimal to exercise an American call option on a non-dividend paying stock early? Consider transaction costs and the time value of money. Remember the value of an American call option is always greater than or equal to its intrinsic value.
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