An option that may be exercised only on the expiration date is called a(n) _____ option.
A) European
B) American
C) Bermudan
D) futures
E) Asian

Question

Quizplus · Accepted Answer

European options can only be exercised on the expiration date, whereas American options can be exercised any time before expiration. Bermudan options can be exercised on specified dates before expiration, and futures options have their own unique characteristics. Asian options are based on an average price over a certain period of time, and their exercise dates depend on the specific terms of the option contract.

An Option That May Be Exercised Only on the Expiration