A situation in which early exercise of an American put can be justified is
a. bankruptcy
b. merger
c. if X exceeds S0 by greater than any transaction costs.
d. both a and b
e. both a and b and c
Answer: A
A situation in which early exercise of an American put can be justified is
a. bankruptcy
b. merger
c. if X exceeds S0 by greater than any transaction costs.
d. both a and b
e. both a and b and c
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