Barrier options have payoffs that
A) have payoffs that only depend on the minimum price of the underlying asset during the life of the option.
B) depend both on the asset's price at expiration and on whether the underlying asset's price has crossed through some barrier.
C) are known in advance.
D) have payoffs that only depend on the maximum price of the underlying asset during the life of the option.

Question

Quizplus · Accepted Answer

Barrier options' payoffs depend on whether the underlying asset's price breaches a predetermined barrier level at any point during the option's life, as well as the asset's price at expiration.

Barrier Options Have Payoffs That