CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Which of the following statements about European and American options is (are) true?

I. An American option permits the owner to exercise at any time before or at expiration. A European option permits the owner to exercise only at expiration.
II. In actual markets, most options are European options.
III. American options are easier to analyze.
Correct Answer: I only

User Contributed Comments 7

User Comment
gth763s What is wrong with II?
RichWang On the OTC market, most (all) are European options. However, on the exchange traded, most are American option.
surob what is wrong with III?
arkot90 european options are easier to analyze because you know the exercise date (the expiration date)
dnoyelles most options are american.
group American options are difficult to analyze since it can be exercised any time before expiration whereas European options can only be exercised at expiration, this feature makes it easier to analyze as compared with American Options
johntan1979 What is wrong with gth763s and surob? Didn't they read the notes?
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