单选题

An investor is long an in-the-money American call option on a dividend paying stock. Would this option most likely ever be exercised early?

A、 No.
B、 Yes, if its time value is high enough.
C、 Yes, if it pays a high enough dividend.

【正确答案】 C

【答案解析】

C is correct because a cash flow such as a dividend payment is required for an early exercise. A dividend payment doesn’t guarantee early exercise, as the dividend also needs to be large enough to justify the early exercise.