Currency options sold through an options exchange:
A) contain a commitment to the owner, and are standardized.
B) contain a commitment to the owner, and can be tailored to the desire of the owner.
C) contain a right but not a commitment to the owner, and can be tailored to the desire of the owner.
D) contain a right but not a commitment to the owner, and are standardized.

Question

Quizplus · Accepted Answer

Currency options sold through an options exchange contain a right but not a commitment to the owner, meaning they have the option but not the obligation to buy or sell the currency at the specified price. They are also standardized, meaning they have predefined terms and conditions and cannot be tailored to the desire of the owner. Therefore, the correct choice is D.

Currency Options Sold Through an Options Exchange