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European-style options can be exercised:
AAt any time up to and including expiry
BOnly on the date of expiry
CAt the option of either party at any time
DOnly if the option ends in-the-money
Answer & Solution
Correct answer: B. Only on the date of expiry
1. Identify what the question asks: this concept maps to europeanoption (§6.5).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (B).
_Source: ICAI BoS CA Final Paper 2, Ch 9 "Derivatives Analysis and Valuation"_
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