The Writer of a Currency Call Option Is Obligated to Buy

question 127

True/False

The writer of a currency call option is obligated to buy the currency if the option is exercised.

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Definitions:

Levied On

Imposed or applied, typically in the context of taxes or duties on goods, services, or income.

Seller Bears

Refers to situations where the seller is responsible for costs or burdens, such as during the transaction of goods where the seller pays for shipping or returns.

Encourage Market

Strategies or policies implemented to stimulate economic activity within a market by promoting the production and consumption of goods and services.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare, indicating who ultimately bears the burden of the tax.