An option where the holder has the right to sell foreign currency to the writer of the option is a

Question

Quizplus · Accepted Answer

A put option gives the holder the right, but not the obligation, to sell an underlying asset (in this case, foreign currency) to the writer of the option at a specified price (strike price) within a specified time period. Therefore, B is the correct answer as it describes an option where the holder has the right to sell foreign currency. A forward option is not a commonly used term in finance, and a call option gives the holder the right to buy, not sell, an underlying asset. A swap option is also not a commonly used option in finance.

An Option Where the Holder Has the Right to Sell