The buyer of a currency put option has:
A) Substantial opportunity for gain and limited risk of loss
B) Substantial risk of loss and substantial opportunity for gain
C) Limited risk of loss and limited opportunity for gain
D) Substantial risk of loss and limited opportunity for gain

Question

Quizplus · Accepted Answer

The buyer of a currency put option has the right to sell a currency at a specified price, which provides substantial opportunity for gain if the currency's value decreases. The risk is limited to the premium paid for the option, making the risk of loss limited.

The Buyer of a Currency Put Option Has