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Basic Question 3 of 9
Which factors DISCOURAGE early exercise of American puts?
II. Storage costs, if the underlying is a commodity
III. Coupon interest, if the underlying is a bond
I. Dividends, if the underlying is a stock
II. Storage costs, if the underlying is a commodity
III. Coupon interest, if the underlying is a bond
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate the no-arbitrage values of European and American options using a two-period binomial model;
identify an arbitrage opportunity involving options and describe the related arbitrage;
CFA® 2025 Level II Curriculum, Volume 5, Module 32.