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My BBP study text states that for American call options The Black Scholes fomula can be used as it is never optimal eto exercise early, but that for a put option it is not valid.
However I am working though the answer book and there are questions on real Options to deal which can be valued using black Scholes. However the model answer states that you can’t use Black Scholes if option can be exercised early?
Is this because in real life senarios there is an event that is being waited for and it is no longer worth delayING and it is therefore posibly in interest to move forward?
Q23 in practice and revision kit
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