Buying a currency option provides
A)a flexible hedge against exchange exposure.
B)limits the downside risk while preserving the upside potential.
C)a right,but not an obligation,to buy or sell a currency.
D)all of the options

Question

Quizplus · Accepted Answer

Buying a currency option provides all of the above benefits. It is a flexible hedge against exchange exposure as the option holder has the right, but not the obligation, to buy or sell a currency at a predetermined price. It also limits the downside risk of holding a currency position while preserving the upside potential.

Buying a Currency Option Provides