A Call Option Provides an Options Holder

question 108

Multiple Choice

A call option provides an options holder

• A) the obligation to buy foreign currency at a specific price.
• B) the obligation to sell foreign currency at a specific price.
• C) the right to buy foreign currency at a specific price.
• D) the right to sell foreign currency at a specific price.

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Definitions:

Policy Makers

Individuals or groups responsible for making decisions and establishing regulations that guide the operation of governments and organizations.

Inflationary Expectations

The beliefs that consumers, businesses, and investors have about future inflation rates, which can influence economic behavior and policy decisions.

Discretionary Policy

Involves government policies that are implemented through ad-hoc decisions by policymakers, rather than set by predetermined rules.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.