Which of the following statements regarding American puts is/are true?
A)An American put can be exercised any time before expiration.
B)An American put is always at least as valuable as an equivalent European put.
C)A multi-period binomial model can be used to value an American put.
D)All of the options are true.

Question

Quizplus · Accepted Answer

All of the statements regarding American puts are true. A) An American put can be exercised any time before expiration. B) An American put is always at least as valuable as an equivalent European put due to its early exercise feature. C) A multi-period binomial model can be used to value an American put as it allows for the tracking of the underlying asset's price and the value of the option at each point in time.

Which of the Following Statements Regarding American Puts Is/are True