In General,the Lower the Exercise Price Relative to the Current

question 13

Multiple Choice

In general,the lower the exercise price relative to the current spot rate price of the currency,the more valuable

• A)the put option.
• B)the call option.
• C)the arbitrage operation.
• D)the triangular arbitrage.

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Definitions:

Long Position

The act of owning or buying an asset with the expectation that its value will increase over time.

Short Position

An investment strategy where an investor sells a security with the intention to buy it back later at a lower price, expecting the security's price to fall.

Negative Alphas

A metric indicating that an investment has underperformed relative to its benchmark, adjusted for the level of risk.

Go Long

An investment strategy where an investor buys shares or securities with the expectation that their price will rise over time.