Path-dependent options have payoffs that cannot be determined without examining exactly how the asset moved during the life of the option.

Question

Quizplus · Accepted Answer

Path-dependent options, also known as exotic options, are dependent on the path of the underlying asset's price movement over the option's life. Therefore, the payoff cannot be determined without examining the specific path of the asset's price movement.

Path-Dependent Options Have Payoffs That Cannot Be Determined Without Examining