A Path-Independent Option Is

question 23

Multiple Choice

A path-independent option is

• A)An option where the price process is not continuous,i.e. ,it does not follow a smooth path,but jumps from one value to the next.
• B)An option where the option payoff depends on the price of the underlying asset at exercise time but not on the details of the price path followed to that point.
• C)An option where the option payoff is independent of anything that happens to the price of the underlying after inception.
• D)An option where the option payoff is constant regardless of the path taken by the price of the underlying.

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Definitions:

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