What is a "strike price?"
A) The exchange rate that is used to buy a foreign currency today
B) The price that will be paid for goods in a forward contract
C) The exchange rate that will be used if a foreign currency option is executed
D) The difference between the wholesale rate and the retail rate for foreign currency exchange

Question

Quizplus · Accepted Answer

A strike price is the predetermined price at which the holder of an option can buy or sell an underlying asset, such as a currency, if the option is exercised. For foreign currency options, the strike price is the exchange rate that will be used if the option is executed. Therefore, option C is the correct choice.

What Is a "Strike Price