What Is the Intrinsic Value of a Foreign Currency Option

question 6

Multiple Choice

What is the intrinsic value of a foreign currency option?

• A)the difference between the spot rate and the strike price
• B)the gain on the option if it was exercised immediately
• C)the chance that a currency will rise over time to make the option in the money
• D)the difference between a call option and a put option

---

Definitions:

Mexican Market

Can pertain to either the physical marketplaces within Mexico known for their vibrant commerce or the broader economic and consumer market of Mexico.

Financial Resources

Economic capital or funds available to a business or individual for the purpose of investment, operational needs, or growth.

Asian Market

A regional market comprising various countries in Asia, known for its dynamic growth, diverse cultures, and significant economic influence globally.

Minimize Risk

Strategic actions aimed at reducing the likelihood of unfavorable outcomes or potential losses in business operations or decisions.