Asked by Xandrei Lugay on Jun 08, 2024
Verified
The initial maturities of most exchange-traded options are generally ________.
A) less than 1 year
B) less than 2 years
C) between 1 and 2 years
D) between 1 and 3 years
Initial Maturities
The original duration until the expiration or due date of a financial instrument, such as a bond or loan, when first issued.
Exchange-Traded Options
Financial derivatives that give the holder the right, but not the obligation, to buy or sell a specific amount of a security at a set price on or before a certain date.
- Familiarize oneself with the characterization and features of various options, like American, European, Asian, and Quanto options.
- Comprehend the procedures for the expiration and exercise of American-style, European-style, and exotic options.
Verified Answer
DB
Daphne BazileJun 13, 2024
Final Answer :
A
Explanation :
The correct answer is A - less than 1 year. Exchange-traded options usually have maturities of less than one year, ranging from a few days to several months. This allows investors to make short-term hedging or speculative trades. Options with longer maturities are also available, but are less common.
Learning Objectives
- Familiarize oneself with the characterization and features of various options, like American, European, Asian, and Quanto options.
- Comprehend the procedures for the expiration and exercise of American-style, European-style, and exotic options.