Question

An American put might be exercised early even when there are no dividends on the underlying stock.

True

False

Answer 1

True. In American put might be exercise anytime just like American call option put option gives you the right to exercise option in time before the expiration of that a European call or put option you can only exercise on expiration date a put option is opposite it gives you the right to sell the specified stock at a specified price European options can be exercised only on the date of expiration this is different than American options the holder of the call option in the money on a dividend paying back stock may decide to exercise stock early to receive the payment amount.