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Is the price of American options generally lower or higher than the price of European options? Try to explain why.

Answer: The price of American options is generally higher than the price of European options. If dividends are paid, American options not only have all the characteristics of European options, but also have the opportunity to exercise early. Therefore, they are at least equal to a European option with the same exercise price and expiration date, and are generally higher than the price of European options.