Question

In which of the following types of options does the owner have the right to require the sale to take place on (but not before) the maturity date.

a.

Call option

b.

Put option

c.

American option

d.

European option

Posted under IC 89 Management Accounting

Answer: (d).European option Explanation:In a European option, the owner has the right to require the sale to take place on (but not before) the maturity date. This means that the option can only be exercised at the expiration date, not before. In contrast, an American option allows the owner to require the sale at any time up to the maturity date, providing more flexibility in terms of when the option can be exercised.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. In which of the following types of options does the owner have the right to require the sale to take place on (but not before) the maturity date.
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. __________ is an instrument, which is embedded in another contract known as host contract.

View solution

Q. What is the purpose of a Credit Derivative, such as a Credit Default Swap (CDS)?

View solution

Q. What distinguishes an American Option from a European Option based on maturity date?

View solution

Q. What is the primary difference between a Call Option and a Put Option?

View solution

Q. What is a key characteristic that distinguishes a futures contract from a forward contract?

View solution

Q. What does a Forward contract represent in the context of financial derivatives?

View solution

Q. What are the two main categories of derivatives based on the market place?

View solution

Q. What is the primary purpose of using derivatives in financial risk management?

View solution

Q. Which of the following statements best defines Financial Risk Management?

View solution

Q. What is the basic reason for the emergence of a well-functioning derivative market in India?

View solution

Q. What has been the growth trend of derivatives market in India since June 2000?

View solution

Q. How is the repricing of futures contracts different from forward contracts?

View solution

Q. What is the key difference between Futures and Forwards regarding fulfillment of the contract on the delivery date?

View solution

Q. What is the strike price in an options contract?

View solution

Q. What is the main difference between a Call Option and a Put Option?

View solution

Q. What is the classification of options based on the maturity date?

View solution

Q. What is the main characteristic of options contracts regarding the buyer's obligation?

View solution

Q. What is the prime motive for futures contracts?

View solution

Q. In what form are Stock Index futures traded?

View solution

Q. What are examples of commodity futures?

View solution
View All MCQs on IC 89 Management Accounting

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Virology

Explore the captivating world of Virology with our specialized category. Dive into...

Electrical Measurement and Instrumentation

Unlock the world of electrical measurements with our dedicated category. Explore...

Analytical Instrumentation

Dive into the world of precise measurements with our Analytical Instrumentation...

Biochemical Engineering

Master the synergy of biology and engineering with our Biochemical Engineering...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

Total Quality Management

Enhance your understanding of quality management with our Total Quality Management...

International Relations

Navigate the complex world of International Relations with our dedicated category....

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Professional Communication

Hone your communication skills with our Professional Communication category. Enhance...