A European Option Is Different from an American Option in That

question 85

Multiple Choice

A European option is different from an American option in that

• A)one is traded in Europe and one in traded in the United States.
• B)European options can only be exercised at maturity; American options can be exercised prior to maturity.
• C)European options tend to be worth more than American options,ceteris paribus.
• D)American options have a fixed exercise price; European options' exercise price is set at the average price of the underlying asset during the life of the option.

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