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 more valuable than an equivalent European put.
C)A multi-period binomial model can be used to value an American put.
D)All of the options

Question

Quizplus · Accepted Answer

An American put can be exercised any time before expiration, and a multi-period binomial model can be used to value an American put. An American put is not always more valuable than an equivalent European put, as the early exercise premium can be offset by the higher cost of the American put.

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