Which of the following statements is true of the value of European (E)options,American (A)options,and Bermudan (B)options?
A) $A B E$
B) $A E B$
C) $E A B$
D) $B A E$

Question

Which of the following statements is true of the value of European (E)options,American (A)options,and Bermudan (B)options?
A) $A > B > E$
B) $A > E > B$
C) $E > A > B$
D) $B > A > E$

Quizplus · Accepted Answer

American options, which can be exercised at any time before expiration, are generally the most valuable. Bermudan options, which can be exercised at specific times before expiration, are next. European options, which can only be exercised at expiration, are the least valuable.

Which of the Following Statements Is True of the Value A>B>EA > B > EA>B>E

Which of the Following Statements Is True of the Value $A > B > E$