Final answer:
European style options will be exercised automatically if the value of the underlying security hits or exceeds a specified capped price.
Step-by-step explanation:
The subject of this question is Business and the grade level is College.
In the context of options trading, the style options that will be automatically exercised if the value of the underlying security hits or exceeds a specified capped price are European style options.
European style options can only be exercised at expiration, whereas American style options can be exercised at any time before expiration.
To illustrate, if an investor holds a European call option on a stock with a capped price of $50 and the stock price reaches or exceeds $50 at expiration, the option will be automatically exercised.