A European option is different from an American option in that
A)one is traded in Europe and one in traded in the United States.
B)European options can only be exercised at maturity; American options can be exercised prior to maturity.
C)European options tend to be worth more than American options,ceteris paribus.
D)American options have a fixed exercise price; European options' exercise price is set at the average price of the underlying asset during the life of the option.

Question

Quizplus · Accepted Answer

The main difference between European and American options is the exercise feature. European options can only be exercised at maturity, while American options can be exercised at any time prior to maturity.

A European Option Is Different from an American Option in That