The put option were american

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Reference no: EM131625418

A stock price is currently $50. Over each of the next two years it is expected to go up by 10% or down by 10%. The risk-free interest rate is 4% per annum with continuous compounding.

If the put option were American, would it ever be optimal to exercise it early at any of the nodes of the tree?

Reference no: EM131625418

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