For Lookback Options

question 58

Multiple Choice

For lookback options,

• A)the option holder must decide before maturity whether the option is a call or a put.
• B)the option holder chooses as the exercise price any of the asset prices that occurred before the final date.
• C)the option payoff is zero if the asset price is on the wrong side of the exercise price and otherwise is a fixed sum.
• D)the exercise price is equal to the average of the asset's price during the life of the option.

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Definitions:

Echoic Memory

Echoic Memory is a subcomponent of sensory memory that allows individuals to retain and recall auditory information for a brief period after the original sound has ended.

Long-term Memories

Memory storage that allows individuals to retain information for extended periods, sometimes for a lifetime.

Hippocampus

A critical brain structure located in the medial temporal lobe, involved in the formation and retrieval of memories.

Anterograde Amnesia

A loss of the ability to create new memories after the event that caused amnesia, leading to a partial or complete inability to recall the recent past, while long-term memories from before the event remain intact.