A Hedge Constructed Using a Put Foreign Currency Option Would

question 31

True/False

A hedge constructed using a put foreign currency option would protect you against value losses, but allow, at the same time, the possibly reap value increases in the event the exchange rate moved in your favor.

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Definitions:

Arousal Stage

A phase in psychological and physiological response that involves increased alertness, energy, and readiness for action.

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Adrenal Glands

A pair of endocrine glands that release hormones that prepare the body for emergencies and stressful situations and also release corticoids and small amounts of the sex hormones.

Pituitary Gland

The endocrine gland located in the brain that releases hormones that activate other endocrine glands as well as growth hormone; often called the “master gland.”