Asked by nikki scalera on May 06, 2024
Verified
Asian options differ from American and European options in that
A) they are only sold in Asian financial markets.
B) they never expire.
C) their payoff is based on the average price of the underlying asset.
D) they are only sold in Asian financial markets and they never expire.
E) they are only sold in Asian financial markets and their payoff is based on the average price of the underlying asset.
Asian Options
A type of option where the payoff depends on the average price of the underlying asset over a certain period of time rather than at maturity.
American Options
Options that can be exercised at any time before expiration, as opposed to European options which can only be exercised on the expiration date.
European Options
Financial derivatives that give the holder the right to buy or sell an underlying asset at a specified price, but only on the option's expiration date.
- Identify and describe various types of options (e.g., American, European, Asian).
Verified Answer
Learning Objectives
- Identify and describe various types of options (e.g., American, European, Asian).
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