Currency Options and Currency Futures Options Have Different Values Because

question 8

Multiple Choice

Currency options and currency futures options have different values because

• A) the payoff on the currency option depends on the exchange rate at maturity,while the currency futures option's payoff depends on the exchange rate futures price at maturity.
• B) the payoff on the currency option depends on the exchange rate futures price at maturity,while the currency futures option's payoff depends on the exchange rate at maturity.
• C) currency options are American while currency futures options are European.
• D) currency futures options are American while currency options are European.
• E) currency options are quoted in U.S.dollars while currency futures options are quoted in the foreign currency.

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Definitions:

Accounting

The systematic process of recording, summarizing, and analyzing financial transactions of a business.

Fundamental Qualities

Essential attributes or characteristics that contribute to the usefulness or value of information, especially in the context of financial reporting.

Verifiability

The quality of being able to be proven or confirmed as accurate or true.

Timeliness

The aspect of delivering or completing a task within an expected or designated timeframe.