An option that can be exercised any time before its expiration date is called:
A)a European option.
B)an American option.
C)a call option.
D)a put option.

Question

Quizplus · Accepted Answer

An American option can be exercised at any time before its expiration date, while a European option can only be exercised on the expiration date. A call option gives the buyer the right to buy the underlying asset at a certain price, while a put option gives the buyer the right to sell the underlying asset at a certain price. The option type (call or put) does not determine whether it is American or European, only the exercise style.

An Option That Can Be Exercised Any Time Before Its