The optimal time to exercise Country AM’s call option early. Introduction: Option is a contract that involves the act of purchasing a financial asset from one party and selling it to another party on an agreed price for a future date. There are two types of options. They are as follows: An option that buys an asset is called as call option An option that sells an asset is called as put option . Country AM’s option is a form of option wherein the trader has the ability to exercise the option at any time.

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Chapter 20.5, Problem 3CC

Summary Introduction

To discuss: The optimal time to exercise Country AM’s call option early.

Introduction:

Option is a contract that involves the act of purchasing a financial asset from one party and selling it to another party on an agreed price for a future date. There are two types of options. They are as follows:

An option that buys an asset is called as call option

An option that sells an asset is called as put option.

Country AM’s option is a form of option wherein the trader has the ability to exercise the option at any time.

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