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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Definitions:

Referent Informational Influence

The impact of adopting the behaviors or beliefs of a group or individual that one identifies with or aspires to be like for reasons of accuracy.

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Minorities

Groups in society distinguished by cultural, ethnic, racial, religious, or linguistic characteristics, often having less power or fewer rights compared to the dominant group.

Majority Viewpoint

The opinion or belief that is held by the greater number of individuals within a group or society.