Currency call options allow the purchaser to lock in the price paid for a currency. Therefore, they are often used by MNCs to hedge foreign currency payables.

Name: Currency call options allow the purchaser to lock in the price paid for a currency. Therefore, they are often used by MNCs to hedge foreign currency payables.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Currency call options can provide a hedge against unfavorable currency fluctuations, allowing MNCs to lock in a favorable exchange rate for their foreign currency payables.

Currency Call Options Allow the Purchaser to Lock in the Price