What is one unique thing that occurs in options but is not there in futures, forwards, or swaps?

Select one: a. obligation to accept losses as well as gains b. arbitrage c. the premium d. discount rates

An American option allows conversion of the option into the underlying at any time, whereas a European option does not.

Select one:

True

False

The Binomial Option Pricing model simulates future possible paths for the option, and brings those paths back to today in order to figure out a "fair" price for the option.

Select one:

True

False