Asked by Connor Culhane on Jun 30, 2024
Verified
An option that may be exercised at any time up to its expiration date is called a(n) :
A) Futures option.
B) Asian option.
C) Bermudan option.
D) European option.
E) American option.
American Option
A type of options contract that can be exercised at any time before its expiration date.
Expiration Date
In finance, it refers to the date on which a financial instrument (e.g., options, futures) ceases to be valid and the right to exercise it no longer exists.
Exercised
In finance, most commonly refers to the act of utilizing one's right to buy or sell an underlying financial instrument, such as stocks, as specified in a contract.
- Gain insight into the features and evaluation of distinct categories of options (American, European) and their associated exercise privileges.
Verified Answer
ZK
Zybrea KnightJul 07, 2024
Final Answer :
E
Explanation :
American options can be exercised at any time up to their expiration date, unlike European options which can only be exercised on the expiration date itself.
Learning Objectives
- Gain insight into the features and evaluation of distinct categories of options (American, European) and their associated exercise privileges.