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This morning, you sold an American-style option to sell CBA shares at $95 per share in 2 months' time. The share price of CBA has
This morning, you sold an American-style option to sell CBA shares at $95 per share in 2 months' time. The share price of CBA has just dropped significantly to $55 due to the coronavirus crash. Which of the following is correct? None of the other statements is correct. More than one of the other statements is correct. You should exercise the option early if the share price is expected to increase in the future. Increase in risk-free rate will make your position in the option less valuable. You should only exercise the option before maturity if a large dividend is expected during the remaining life of the option
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