Currency-translated options have
A) only asset prices denoted in a foreign currency.
B) only exercise prices denoted in a foreign currency.
C) payoffs that only depend on the maximum price of the underlying asset during the life of the option.
D) either asset or exercise prices denoted in a foreign currency.

Question

Quizplus · Accepted Answer

Currency-translated options can have either the asset prices or the exercise prices denoted in a foreign currency, allowing for flexibility in how they are structured to meet the needs of investors looking to hedge against currency risk or speculate on currency movements.

Currency-Translated Options Have