An option contract that can only be exercised on the expiration date is called a(n) ________ option.
A) European
B) put
C) call
D) American
E) Bermudan

Question

Quizplus · Accepted Answer

European options can only be exercised on the expiration date, while American options can be exercised at any time before expiration and Bermudan options can be exercised on specific dates before expiration. A put or call option indicates whether the holder has the right to sell or buy a security at a specified price, but the type of option does not affect the exercise date.

An Option Contract That Can Only Be Exercised on the Expiration