The hedging contract that gives the buyer the right,but not the obligation,to buy a specific amount of foreign currency with domestic currency is known as the ________.

Question

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A call option gives the buyer the right, but not the obligation, to buy a specific amount of foreign currency with domestic currency. This is a type of hedging contract used to protect against adverse movements in foreign exchange rates. A put option, on the other hand, gives the buyer the right to sell a specific amount of foreign currency with domestic currency. American and European options are types of call and put options that differ in their exercise dates.

The Hedging Contract That Gives the Buyer the Right,but Not