Question: When there are two dividends on a stock, Blacks approximation sets the value of an American call option equal to which of the following? a.

When there are two dividends on a stock, Blacks approximation sets the value of an American call option equal to which of the following?

The value of a European option maturing just before the second dividend

The higher of the following three values: 1) the value of a European option maturing just before the first dividend; 2) the value of a European option maturing just before the second dividend and 2) the value of a European option assuming no early exercise

The value of a European option maturing just before the first dividend

The higher of the following two values: 1) the value of a European option maturing just before the second dividend and 2) the value of a European option assuming no early exercise

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