A Foreign Currency Option Is an Agreement Between a Holder

question 144

True/False

A foreign currency option is an agreement between a holder (corporation) and a writer (commercial bank) giving the holder the right to buy or sell a certain amount of foreign currency at any time through some specified date.

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Definitions:

Costs Recorded

Expenses documented in the financial records of a business, reflecting the economic use of resources.

Carrying Amount

Refers to the value of an asset or liability as reported on the balance sheet, considering factors like depreciation or amortization.

Depreciable Asset

A long-term asset subject to depreciation, reflecting the decrease in value over time due to wear and tear, age, or obsolescence.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up.