Answer-first summary for fast verification
Answer: True
**True.** The payoff formulas use the most favorable observed price: - **Floating lookback call**: uses the **minimum** price observed over the life of the option. - **Floating lookback put**: uses the **maximum** price observed over the life of the option. - **Fixed lookback call**: uses the **maximum** price observed. - **Fixed lookback put**: uses the **minimum** price observed. So the statement matches the correct MAX/MIN usage.
Author: Manit Arora
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Q-17.1b. Are the following statements about lookback options TRUE or FALSE?
b) The MAX(.) function is employed by a floating lookback put and fixed lookback call, while the MIN(.) function is employed by a floating lookback call and fixed lookback put
A
True
B
False
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