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Which of the following statements are true about early option exercise (for American style options)? (Assume r > 0)? It is never optimal to early
Which of the following statements are true about early option exercise (for American style options)? (Assume r > 0)?
- It is never optimal to early exercise a call option on a non-dividend paying stock.
- It is never optimal to early a put option on a non-dividend paying stock.
- It is always optimal to early exercise an in the money American style option on the day before a dividend is payable.
- Because of possibility of early exercise, put call parity does not apply to American style options.
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