The Gain from the Early Exercise of an American Put

question 20

True/False

The gain from the early exercise of an American put is X(1 + r)^-T - S₀.

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Definitions:

Postsynaptic Potential

A change in membrane potential of the postsynaptic terminal of a synapse, typically induced by the binding of neurotransmitters.

Neurotransmitters

Chemical substances that transmit signals across a synapse from one neuron to another in the brain and nervous system.

Synaptic Cleft

The narrow space between the terminal button of a neuron and the dendrite or cell body of another neuron where neurotransmitters are released.

Inhibitory Postsynaptic

Referring to a postsynaptic potential that makes a neuron less likely to generate an action potential, essentially serving to inhibit neuronal firing.