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Question

An option that can be exercised only at expiration is called ____

A European Option Correct Answer Incorrect Answer
B American Option Correct Answer Incorrect Answer
C Bermuda Option Correct Answer Incorrect Answer
D Call option Correct Answer Incorrect Answer
E Put Option Correct Answer Incorrect Answer

Solution

An option is a derivative which gives the owner the right but not the obligation to sell/buy a specified quantity of the underlying asset at a particular price on or before a specified time. When the option can be exercised only at the expiration, it is referred to as a European option. The options that can be exercised at any time up to the expiration date are called American Options.

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