alleryStart learning →What is the defining feature of a barrier option?
AIt pays a fixed sum
BPrice must cross a level
CIt is exercised monthly
DIt has no expiry date
Answer & Solution
Correct answer: B. Price must cross a level
A barrier option can be exercised only once the underlying price crosses a preset barrier level.
Keep practising Option (Finance)
Browse all Option (Finance) questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
When is charm especially useful for a delta-hedger?Which Greek is most important for an at-the-money straddle?Speed measures the change in gamma with respect to what?Which Greek is also known as vega convexity?Which Greek is called delta decay?Gamma is classed as which kind of Greek?Which Greek measures sensitivity to the interest rate?Which Greek measures the time decay of an option?