An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:
A) European-style option
B) American-style option
C) Bermudan option
D) Asian option

Question

Quizplus · Accepted Answer

A Bermudan option allows the holder to exercise the option at several set dates during its lifespan, whereas a European-style option can only be exercised at its expiration date and an American-style option allows the holder to exercise at any point up to its expiration date. An Asian option has its payoff determined by the average price of the underlying asset over a period of time.

An Option Contract That Gives the Buyer the Right to Exercise