Question

An option that can be exercised only at maturity is called a(n) ______.A) swapB) stock optionC) European optionD) American

Answer 1

C) European option.

Step-by-step explanation:

European options are financial derivatives that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (strike price) on a specified date (maturity date). In the case of a European option, it can only be exercised at its expiration or maturity date. This is in contrast to an American option (option D), which can be exercised at any time before its expiration date.