When Can Bermudan Options Be Exercised

question 8

Multiple Choice

When can Bermudan options be exercised?

• A) Any time during the life of the options
• B) Any time after a certain date up to the end of the life of the life
• C) Any time before a certain date or at the end of the option's life
• D) On dates specified at the start of the option

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Definitions:

Marginal Tax Rate

The tax rate applied to the last dollar of income earned.

Direct Tax

Direct Tax is a type of tax directly imposed on individuals or organizations, such as income tax or corporate tax, where the tax burden cannot be shifted to another party.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the percentage of additional income that must be paid in taxes.

Average Tax Rate

The ratio of the total amount of taxes paid by an individual or business to the total income or profit earned.