Despite the different exercising arrangements of American and European options, they usually have prices that are close to each other.

Name: Despite the different exercising arrangements of American and European options, they usually have prices that are close to each other.
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Question

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The prices of American and European options are often close because the early exercise feature of American options is usually not optimal, especially for non-dividend paying stocks, making their prices similar.

Despite the Different Exercising Arrangements of American and European Options