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Explain why the following variables affect positively the price of American put options: (i) The strike price. [5 marks] (ii) The time to expiration. [5

Explain why the following variables affect positively the price of American put options: (i) The strike price. [5 marks] (ii) The time to expiration. [5 marks] (iii) The amount of future dividends on the underlying stock. [5 marks]

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