All Questions
1 question
2
votes
1
answer
87
views
Understanding the necessary and sufficient conditions for rational early exercise of a call option
I am self-studying for an actuarial exam, and I encountered the following in my text:
The author states that if $PV_{t, T}\text{(Divs)} < K(1 - e^{-r(T - t)})$, early exercise is not rational.
...
- 369