Consider a two-period binomial model,where each period is 6 months.Assume the stock price is $60.00,σ = 0.30,r = 0.05.An American put option with a strike price of $65 would be exercised early at what dividend yield?
A) 5.0%
B) 6.0%
C) 11.0%
D) Never exercised early

Question

Quizplus · Accepted Answer

The American put option will never be exercised early because the stock price is below the strike price.

Consider a Two-Period Binomial Model,where Each Period Is 6 Months