contestada

The primary difference between an American call option and a European call option is the fact that the American call:
a. is a right to buy while a European call is an obligation to buy.
b. has a fixed strike price while the European strike price varies over time.
c. can be exercised at any time prior to expiration while the European call can only be exercised on the expiration date.
d. is written on 100 shares of the underlying security while the European call covers 10 shares.
e. has an expiration date while the European call does not.

Respuesta :

Answer:

C. Can be exercised at any time prior to expiration while the European call can only be exercised on the expiration date.

Explanation:

It is said that in as much as the two sound, they have nothing to do with geographic location. An American option is seen to properly show the actual timeframe when the option holder can exercise their option contract rights. Such rights most times give the holder the chance to purchase or even sell in some cases which are seen to be tied on the fact that it is a call or even a put. It is also seen that a majority of exchanges that were been traded on single stocks are American, while options on indexes tend to be European style. That is why the most important difference is that an be exercised at any time prior to expiration while the European call can only be exercised on the expiration date.

Otras preguntas