Why is an American option always worth more than its intrinsic value? (As an example, recall that the intrinsic value at time t for the call option is max(S(t) K; 0).)
Why is an American option always worth more than its intrinsic value? (As an example, recall that the intrinsic value at time t for the call option is max(S(t) − K; 0).)
This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!
Answer
Because we can always exercise immediately, and receive the intrinsic value. We …View the full answer
Related Book For 
Organic Chemistry
6th Edition
Authors: Robert Thornton Morrison, Robert Neilson Boyd
ISBN: 9788120307209