An option that can be exercised only at maturity is called a(n)________.
A) swap
B) stock option
C) European option
D) American option

Question

Quizplus · Accepted Answer

A European option can be exercised only at maturity, as opposed to an American option which can be exercised at any time prior to or at maturity. A swap is a financial contract between two parties to exchange cash flows in the future, and a stock option is a type of derivative security that gives the holder the right, but not the obligation, to buy or sell a stock at a certain price before a certain date.

An Option That Can Be Exercised Only at Maturity Is