Other things equal, which of these American options are you most likely to want to exercise early?
Question:
Other things equal, which of these American options are you most likely to want to exercise early?
a. A put option on a stock with a large dividend or a call on the same stock.
b. A put option on a stock that is selling below exercise price or a call on the same stock.
c. A put option when the interest rate is high or the same put option when the interest rate is low.
Illustrate your answer with examples.
AppendixLO1
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: