Currency call options allow the purchaser to lock in the price paid for a currency. Therefore, they are oFten used by MNCs to hedge foreign currency payables.

Question

Quizplus · Accepted Answer

Currency call options provide the right but not the obligation to buy a currency at a predetermined price within a specific time frame. By purchasing these options, MNCs can lock in the price paid for a currency and protect themselves against potential losses due to currency fluctuations. Therefore, the statement is true.

Currency Call Options Allow the Purchaser to Lock in the Price