American Options Allow Their Holders to Exercise the Option ________

question 34

Multiple Choice

American options allow their holders to exercise the option ________.European options allow their holders to exercise the option ________.

• A) only on the expiration date; on any date up to and including a final date
• B) on any date up to but not including expiration date; on any date up to and including a final date
• C) on any date up to and including a final date; only on the expiration date
• D) on any date before the expiration date; on any date including the expiration date

Understand and calculate the variance and standard deviation of returns for both individual securities and portfolios.

Evaluate the pricing of securities (overpriced or underpriced) based on their expected return versus their actual return.

Understand the concept of risk premium and how it relates to the expected return of securities.

Utilize the security market line (SML) to assess the risk-return profile of securities and portfolios.