In a Barrier Option

question 16

Multiple Choice

In a barrier option,

• A) Price paths are bounced off the barrier.
• B) Option payoffs are conditional on whether the underlying breached the barrier during the option's life.
• C) Option payoffs are conditional on when the underlying breached the barrier during the option's life.
• D) Conditional on the barrier being breached during the option's life, option payoffs differ based on how many times the barrier was breached.

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Definitions:

Observable Data

Information that can be measured or noted through direct observation or experience.

Dynamic

Pertaining to a system or process characterized by constant change, activity, or progress.

Pluralistic Societies

Societies characterized by the coexistence of diverse groups, cultures, or individuals with varying beliefs and practices, often in a state of mutual respect.

Multiethnic

Referring to a society, group, or area that comprises individuals from multiple ethnic backgrounds, cultures, and heritages.