An important feature of a ________ is that the holder has the right,but not the obligation,to buy or sell currency.

Question

Quizplus · Accepted Answer

A foreign exchange option gives the holder the right, but not the obligation, to buy or sell currency at a specific exchange rate at a future date. Swaps involve the exchange of currencies, while foreign exchange arbitrage and futures market contracts involve buying and selling currencies at current market rates with the obligation to execute the transaction in the future.

An Important Feature of a ________ Is That the Holder