When the exercise price is increased, it would unambiguously increase the value of an American put option.

Name: When the exercise price is increased, it would unambiguously increase the value of an American put option.
Brand: Quizplus
Rating: 4.9 (40 reviews)

Question

Quizplus · Accepted Answer

Increasing the exercise price of an American put option increases its intrinsic value, as the option gives the holder the right to sell the underlying asset at a higher price, thus increasing the option's value.

When the Exercise Price Is Increased, It Would Unambiguously Increase