If you expect the British pound to appreciate, you could speculate by ____ pound call options or ____ pound put options.
A) purchasing; selling
B) purchasing; purchasing
C) selling; selling
D) selling; purchasing

Question

​If you expect the British pound to appreciate, you could speculate by ____ pound call options or ____ pound put options.
A) ​purchasing; selling
B) ​purchasing; purchasing
C) ​selling; selling
D) ​selling; purchasing

Quizplus · Accepted Answer

If you expect the British pound to appreciate, you could purchase pound call options that give you the right to buy the pound at a predetermined price. This would allow you to benefit from the appreciation of the pound. On the other hand, selling pound put options would involve selling the right to sell pounds at a predetermined price. This strategy would be risky if the pound appreciates, as you would be obligated to buy pounds at a lower price than the market value. Therefore, the best choice in this scenario is to purchase pound call options.

​If You Expect the British Pound to Appreciate, You Could

If You Expect the British Pound to Appreciate, You Could