In general,the lower the exercise price relative to the current spot rate price of the currency,the more valuable

Question

Quizplus · Accepted Answer

When the exercise price of a call option is lower than the current spot rate price of the currency, it is considered to be in-the-money, and thus more valuable. This is because the option holder has the right to buy the currency at a lower price than the current market price, allowing them to potentially make a profit upon exercising the option. Therefore, the correct answer is B) the call option.

In General,the Lower the Exercise Price Relative to the Current