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 are correct.

Question

Quizplus · Accepted Answer

American put options are more valuable than European puts because they can be exercised at any time up to the expiration date, providing more flexibility and potential for profit if the underlying asset's price falls below the strike price before expiration.

Relative to European Puts, Otherwise Identical American Put Options