As a Foreign Exchange Hedging Tool, Options Have All of the Following

question 23

Multiple Choice

As a foreign exchange hedging tool, options have all of the following characteristics EXCEPT

• A) specifies price.
• B) the right to buy or sell an amount of foreign currency.
• C) specifies time period.
• D) represents an obligation to buy or sell.

Assess the relevance of health conditions and employment stability on insurance planning.

Understand the concept of policy dividends and the characteristics of participating and non-participating policies.

Recognize the importance of policy features such as cash value, term and conditions for renewal or conversion.

Evaluate the benefits and drawbacks of mutual versus stock life insurance companies.

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Definitions:

Price

The amount of money or consideration exchanged for the ownership or use of a good or service.

Business

An organization or enterprising entity engaged in commercial, industrial, or professional activities, often structured to produce and sell goods and services for profit.

Present Value

Present value represents the current value of a future amount of money or series of cash flows, discounted at a certain rate of return.

Discount Rate

In finance, the rate used to discount future cash flows to their present value, essentially reflecting the time value of money and risk.