Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'knock-out option'?

A. exotic option that has a pre-determined payout if the option is in-the-money and the payoff condition is satisfied
B. barrier option with a built-in mechanism to expire as worthless if a specified price level in the underlying asset is reached
C. barrier option applied to currencies or over the counter stocks that works as a binary, or digital option in that it pays out only under defined circumstances, or it is worthless, at expiration
D. barrier option that is not triggered until a certain price threshold is met

Answer: barrier option with a built-in mechanism to expire as worthless if a specified price level in the underlying asset is reached