medium · Quantitative Finance derivatives

Which of the following is a primary reason corporate hedgers might prefer Asian options over vanilla options?

1. They allow unlimited early exercise before the averaging period concludes.
2. They protect against price manipulation of the underlying asset on the expiration date.
3. They provide a strictly higher maximum potential payoff ceiling than comparable lookback options.
4. They guarantee that the option will finish in-the-money regardless of the underlying asset's path.

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