Tomorrow’s meeting of Finance 4366

Since we completed our discussion of pricing European options using the binomial model just prior to spring break, tomorrow we will turn our attention to pricing American options. I plan to cover the reading entitled “Early Exercise of American Call and Put Options on Non-Dividend Paying Stocks”, and if time permits we’ll also move on to pricing options on dividend-paying stocks. Since I am late in bringing this change in schedule to your attention, I won’t have a quiz at the beginning of class. However, I highly recommend that y’all read this teaching note prior to coming to class tomorrow so that you can be somewhat familiar with the topic that we will be covering.

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