Part one of term paper
Explain Why It Is Impossible to Derive An Analytical Formula For Valuing American Explain why it has proved impossible to derive an analytical formula for valuing American Puts, and outline the main techniques that are used to produce approximate valuations for such securities Investing in stock options is a way used by investors to hedge aga ...

Part two of term paper
... the right to sell the underlying security at X. However only America options can be exercised at any time during the life of the option if the holder sees fit while European options can only be exercised at the expiration rate, and this is the reason why American put options are normally valued higher than European options. Nonetheless it has been proved by academics that it is impossible to derive an analytical formula for valuing American put options and the reason why will be discussed in ...