The major difference between options on real assets and options on financial assets is that options on:
A)Financial assets are costly
B)Financial assets have a higher probability of positive payoff
C)Real assets are implicit, rather than explicit
D)Real assets are not influenced by price volatility

Question

Quizplus · Accepted Answer

The major difference between options on real assets and options on financial assets is that options on real assets are implicit, rather than explicit. Options on financial assets are explicit and have a well-defined market that can be used to determine market prices. Real assets, on the other hand, have a less well-defined market and may not be as straightforward to value.

The Major Difference Between Options on Real Assets and Options