Which of the Following Types of Option Is More Valuable

question 15

Multiple Choice

Which of the following types of option is more valuable?

• A)American put option
• B)European put option
• C)Need additional information
• D)Neither one

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Definitions:

Contract

An agreement creating obligations enforceable by law, formed by the mutual consent of parties with capacity to agree.

Market Value

The current price at which an asset or service can be bought or sold in an open and competitive market environment.

Consideration

A fundamental component in contract law that involves something of value exchanged between parties, which is necessary for a contract to be legally binding.

Binding

Describes an agreement or legal decision that is enforceable by law, meaning parties are legally obligated to comply with the terms.