For Lookback Options

question 58

Multiple Choice

For lookback options,

• A)the option holder must decide before maturity whether the option is a call or a put.
• B)the option holder chooses as the exercise price any of the asset prices that occurred before the final date.
• C)the option payoff is zero if the asset price is on the wrong side of the exercise price and otherwise is a fixed sum.
• D)the exercise price is equal to the average of the asset's price during the life of the option.

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Definitions:

Income Received

The total income or earnings received by an individual or entity within a specific period, including all sources.

Middle Three Quintiles

Refers to the second, third, and fourth quintiles of a distribution, often used in economic analysis to describe the middle segment of income earners in a population.

Income Received

The total earnings obtained by households, including wages, salaries, benefits, and investment income.

Upper Quintile

The top 20% segment of a population when it is divided into five equal groups by some measure such as income or wealth.