CFA Practice Question

There are 227 practice questions for this study session.

CFA Practice Question

In general, the expectations approach can be used to value ______.

A. American-style options only
B. European-style options only
C. both American-style and European-style options
Correct Answer: B

This is because for American-style options, early exercise influences the option values and hedge ratios as one works backward through the binomial tree.

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