Explanation

For American options:

• American call options on non-dividend-paying stocks: It is never optimal to exercise early because the time value of the option is always positive. The option holder can always sell the option for more than its intrinsic value rather than exercising it.

• American put options on non-dividend-paying stocks: It can be optimal to exercise early, especially when the stock price is very low. This is because the put option holder can receive the strike price immediately and invest it at the risk-free rate, which may be more valuable than waiting until expiration.

Therefore, option B is correct: "It can be optimal to exercise an American put option on a non-dividend-paying stock early."

Analysis of other options:

• A: Incorrect - American calls on non-dividend stocks should never be exercised early
• C: Incorrect - Same reasoning as A
• D: Incorrect - American puts can be exercised early in certain situations