Which of the Following Is True Regarding the Currency Options

question 45

Multiple Choice

Which of the following is true regarding the currency options market?

• A)Hedgers and speculators both use currency options to attempt to lower risk.
• B)The currency options offered by commercial banks are more liquid and have a smaller bid/ask spread than the options traded on an exchange.
• C)When transaction costs are controlled for, the currency options market is efficient.
• D)all of the above

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Definitions:

Lag Time

The delay between tasks that have a dependency, where one task cannot start until a certain period after the previous task has finished.

Gantt Chart

A visual tool for project planning that displays activities against time, often used for tracking project schedules.

Total Float

The amount of time that a project task can be delayed without causing a delay to the project's overall completion date.

Binomial Probability

The probability of obtaining a given number of successes in a fixed number of binary trials, where each trial has two possible outcomes.