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Let P(S, t) denote the timet price of an American put option, and let p(S, t) denote the timet price of an European put option
Let P(S, t) denote the timet price of an American put option, and let p(S, t) denote the timet price of an European put option Assume that interest rates are positive. For every t < T. We have (regardless of whether there is a dividend)
p(S, t) < P(S, t).
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