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NEW QUESTION: 1
Bea can paint a house three times faster than Alice can paint a house. If, working together, it takes Alice
and Bea 24 hours to paint a house, then how many hours would it take Bea to paint a house alone?
NEW QUESTION: 2
An American option is more valuable than a European option on the same dividend paying stock with the same terms because the:
A. European option contract is not adjusted for stock splits and stock dividends.
B. European option does not conform to the Black-Scholes model and is often mispriced.
C. American option can be exercised from date of purchase until expiration but the European option can be exercised only at expiration.
It is possible that the stock price reaches its maximum or minimum value during the period from date of purchase to expiration, not just on the expiration date. Only an American option can take this kind of opportunity to make profits by being exercised during this period. So it is more valuable.