The Premium of a Currency Put Option Should Increase If

question 43

Multiple Choice

The premium of a currency put option should increase if:

• A) the volatility of the underlying asset increases.
• B) the spot rate increases.
• C) the volatility of the underlying asset increases AND the spot rate increases.
• D) None of these are correct.

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Definitions:

Closing the Revenue

The process of transferring the balances from the revenue accounts to permanent accounts at the end of an accounting period.

Building Account

An account used to track the costs associated with constructing a building over a period of time.

Original Investments

Original investments refer to the initial amount of money invested in an asset, project, or enterprise by its owners or shareholders.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenues.