Question: Consider two American call options on the same underlying stock. Both options have the same exercise price, X = 5 0 $ . The only
Consider two American call options on the same underlying stock. Both options have the same exercise price, X$ The only difference between these options is their maturity. The first has a maturity T year whereas the second has a longer maturity T years.
Can we establish which of the two options has highest value today? Explain your answer in words.
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