Which of the following is most likely true regarding options?
A)An option can only be purchased from a commercial bank.
B)Options are never used with foreign currency.
C)An option is a right to sell foreign currency.
D)Options do not provide firms with flexibility.

Question

Quizplus · Accepted Answer

An option provides the holder with the right, but not the obligation, to buy or sell an asset (including foreign currency) at a specified price within a specified period. Therefore, an option can indeed be a right to sell foreign currency, which is known as a put option.

Which of the Following Is Most Likely True Regarding Options