The Primary Difference Between an American Option and a European

question 311

Multiple Choice

The primary difference between an American option and a European option is the:

• A) Size of the option contract.
• B) The length of the option contract.
• C) Time at which the option can be exercised.
• D) The number of shares of the underlying asset.
• E) The size of the option premium.

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Definitions:

Sum of Squares

A statistical measure used to describe the dispersion of data points. It calculates the sum of the squared differences from the mean.

Simple Linear Regression

A technique in statistics that estimates the association between an independent variable and a dependent variable using a straight line.

Negatively Related

A term describing the relationship between two variables where an increase in one variable is associated with a decrease in the other.

Correlation Coefficient

A statistical measure that calculates the strength of the relationship between two variables and their direction (positive or negative).