An option gives the holder the right to buy or sell foreign currency at a pre-specified price on our up to a pre-specified date.

Question

Quizplus · Accepted Answer

This statement is true. An option contract gives the holder the right, but not the obligation, to buy or sell a specified asset (in this case, foreign currency) at a pre-specified price (also known as the strike price) on or before a pre-specified date (also known as the expiration date).

An Option Gives the Holder the Right to Buy or Sell