If the U.S.government announced that it would allow the dollar to drop in foreign currency markets,the price of a euro put would probably fall.

Question

Quizplus · Accepted Answer

If the dollar drops in foreign currency markets, the euro will become more expensive relative to the dollar. This means that the price of a euro put option will fall, as the option will be less likely to be exercised.

If the USGovernment Announced That It Would Allow the Dollar to Drop