Relative to European puts, otherwise identical American put options
A)are less valuable.
B)are more valuable.
C)are equal in value.
D)will always be exercised earlier.
E)None of the options

Question

Quizplus · Accepted Answer

It is valuable to exercise a put option early if the stock drops below a threshold price; thus American puts should sell for more than European puts.

Relative to European Puts, Otherwise Identical American Put Options