Assume a person is risk averse and have concave utility functions. Currently he/she has stock options which is now exercisable with remaining maturity of 1 year.

The stock price is 10% above the strike price, and stock price can not fall below the strike price and assume expected stock return a year later is zero.

1) Would a rational person exercise the option?

2) Would an optimistic person (expecting the stock price a year later to be higher than the actual expected stock price a year later) exercise the option?

3) Would an overconfident person (sees risk to be less than the actual expected risk) exercise the option (assuming he has the same expected return as the actual expected return)