The primary difference between an American call option and a European call option is the fact that the American call:

Multiple Choice

• is a right to buy while a European call is an obligation to buy.

• has a fixed strike price while the European strike price varies over time.

• can be exercised at any time prior to expiration while the European call can only be exercised on the expiration date.

• is written on 100 shares of the underlying security while the European call covers 10 shares.

• has an expiration date while the European call does not.