Which of the following describes a situation where an American put option on a stock becomes more likely to be exercised early?
A) Expected dividends increase
B) Interest rates decrease
C) The stock price volatility decreases
D) All of the above

Question

Quizplus · Accepted Answer

As the volatility of the option decreases the time value declines and the option becomes more likely to be exercised early.In the case of A and B,time value increases and the option is less likely to be exercised early.

Which of the Following Describes a Situation Where an American