Q-19.2(b). For the same maturity and path, the Asian average strike call cannot pay more than the floating lookback call. | Financial Risk Manager Part 1 Quiz - LeetQuiz
Financial Risk Manager Part 1
Explanation:
Correct answer: TRUE
The Asian average strike call pays:
max[0,S(T)−S(average)]
The floating lookback call pays:
S(T)−S(min)
Since the average price must be greater than or equal to the minimum price, the lookback call can pay more.
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Q-19.2(b). For the same maturity and path, the Asian average strike call cannot pay more than the floating lookback call.
