A put option essentially represents two swaps of currencies: one swap at the inception of the loan contract and another swap at a specified date in the future.

Question

Quizplus · Accepted Answer

A put option is a financial contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price within a specific time frame. It does not involve swaps of currencies at the inception of a loan contract or at a future date.

A Put Option Essentially Represents Two Swaps of Currencies: One