What Is an Advantage of Using Forward Contracts Instead of Options

question 105

Essay

What is an advantage of using forward contracts instead of options to hedge against exchange-rate risk?

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Definitions:

American Public

The collective individuals, or the society, of the United States, often referenced in discussions about public opinion, culture, or national identity.

Truman

The 33rd President of the United States, Harry S. Truman, who served from 1945 to 1953, known for implementing the Marshall Plan to rebuild the economy of Western Europe, and for leading the country during the early stages of the Cold War.

United Nations Security Council

One of the six principal organs of the United Nations, charged with ensuring international peace and security, accepting new members, and approving any changes to its charter.

Allied Powers

A coalition of countries, typically referring to those that opposed the Axis Powers during World War II, including the United States, the United Kingdom, the Soviet Union, and others.