Consider Two Paths a and B for Stock Prices in a Barrier

question 10

Multiple Choice

Consider two paths A and B for stock prices in a barrier option setting that result in the same terminal price.Paths A and B will have different payoff consequences for the barrier option if

• A)Path A crossed the barrier before maturity while Path B did not.
• B)Both paths crossed the barrier prior to maturity but Path A re-crossed it while Path B did not.
• C)Neither path crossed the barrier prior to maturity.
• D)All of the above.

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Definitions:

Alpha Particle

A type of radioactive particle consisting of two protons and two neutrons, equivalent to a helium-4 nucleus, ejected from certain radioactive nuclei.

Beta Particle

An electron or positron, characterized by its high speed and energy, released by an atomic nucleus undergoing radioactive decay.

Gamma Ray

High-energy electromagnetic radiation emitted by atomic nuclei during radioactive decay, with higher energy than X-rays.

Radiation Sickness

A serious illness caused by excessive exposure to ionizing radiation, affecting the skin, gastrointestinal tract, and bone marrow.