Which of the following is the difference between foreign currency options and futures?
A) Options leave a buyer with the choice of exercising or not exercising; whereas the futures require a mandatory delivery.
B) Options require a mandatory delivery; whereas the futures leave a buyer with the choice of exercising or not exercising.
C) Options require daily cash settlements from contract holders; while the futures do not require any daily cash settlements.
D) Options do not require any daily cash settlements; while the futures require daily cash settlements from contract holders.

Question

Quizplus · Accepted Answer

The difference between foreign currency options and futures is that options give the buyer the choice of exercising or not exercising, while futures require a mandatory delivery. This means that options offer more flexibility for the buyer, as they can choose whether or not to exercise their option, whereas futures require them to take delivery of the underlying asset.

Which of the Following Is the Difference Between Foreign Currency