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For lookback options, the exercise price is equal to the average of the asset's price during the life of the option. the option payoff is

For lookback options,

the exercise price is equal to the average of the asset's price during the life of the option.

the option payoff is zero if the asset price is on the wrong side of the exercise price and otherwise is a fixed sum.

the option holder chooses as the exercise price any of the asset prices that occurred before the final date.

the option holder must decide before maturity whether the option is a call or a put.

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