Which of the following is true regarding the currency options market?
A)Hedgers and speculators both use currency options to attempt to lower risk.
B)The currency options offered by commercial banks are more liquid and have a smaller bid/ask spread than the options traded on an exchange.
C)When transaction costs are controlled for, the currency options market is efficient.
D)all of the above

Question

Quizplus · Accepted Answer

The currency options market is considered efficient when transaction costs are controlled for, meaning prices reflect all available information. Hedgers and speculators use options for different purposes, and commercial bank options are typically less liquid than exchange-traded options.

Which of the Following Is True Regarding the Currency Options