Which of the Following Statements Regarding Currency Options Is FALSE

question 41

Multiple Choice

Which of the following statements regarding currency options is FALSE?

• A)Firms often prefer forward contracts to currency options if the transaction they are hedging might not take place.
• B)Currency options are another method that firms commonly use to manage exchange rate risk.Currency options,like stock options,give the holder the right-but not the obligation-to exchange currency at a given exchange rate.
• C)Currency forward contracts allow firms to lock in a future exchange rate;currency options allow firms to insure themselves against the exchange rate moving beyond a certain level.
• D)Many managers want the firm to benefit if the exchange rate moves in their favor,rather than being stuck paying an above-market rate.

---

Definitions:

Mutual Respect

A reciprocal understanding and recognition of the value and dignity of others.

Privacy Concerns

The issues and worries that consumers have regarding how their personal information is collected, used, and shared by companies.

Shopping Online

The action of buying goods or services over the internet.

Consumer Hesitancy

Describes the reluctance or delay in making purchase decisions by consumers, often due to uncertainty or lack of confidence in the product or service.