An option that can be exercised only at maturity is referred to as:
A)a European option
B)a call option
C)a protective put
D)an American option

Question

Quizplus · Accepted Answer

A European option can only be exercised at its maturity date, whereas an American option can be exercised at any time before or on the maturity date. Therefore, option A is the best choice as it accurately reflects the given criteria. Option B, a call option, can be exercised at any time before or on the maturity date. Option C, a protective put, is a type of option that involves purchasing a put option to protect against price declines, and can be exercised before or on the maturity date. Option D, an American option, can be exercised before or on the maturity date.

An Option That Can Be Exercised Only at Maturity Is