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Derivatives




Average Rate Put Option


An average rate option which gives the holder the right, but not the obligation, to sell the underlying asset, with the option’s payoff being the arithmetic or geometric average of the underlying price over a specific period of time, not just the spot price at expiration date.

Average rate put options are almost always less expensive than equivalent ordinary put options.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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