An option that has a payoff based on the maximum or minimum of two (or more) risky assets and cash. For example, the payoff to a rainbow call is max (St, Qt, K), where St and Qt are risky asset prices. This kind of option is often called twocolor rainbow option, because the maximum and the minimum prices of two assets look very much like the shape of rainbow in a two-dimensional diagram, with two asset prices as the two axes.