If you expect the British pound to appreciate, you could speculate by ____ pound call options or ____ pound put options.
A) purchasing; selling
B) purchasing; purchasing
C) selling; selling
D) selling; purchasing

Question

Quizplus · Accepted Answer

If you expect the British pound to appreciate, you would want to purchase pound call options. This gives you the right to buy the pound at a set price, which would be beneficial if the pound appreciates. Additionally, you would not want to sell pound put options as this would give you the obligation to buy the pound at a set price, which would be detrimental if the pound appreciates. Therefore, choice A of purchasing pound call options and selling pound put options is the best choice.

If You Expect the British Pound to Appreciate, You Could