Asked by nikki scalera on May 06, 2024

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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).
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SS
syahidatul syakirahMay 13, 2024
Final Answer :
C
Explanation :
Asian options' payoff is determined by the average price of the underlying asset over a certain period, unlike American and European options which are based on the price of the underlying asset at a specific point in time.