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

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Definitions:

Followers

Individuals who support and are guided by a leader, contributing to the achievement of the leader’s or group’s objectives.

Leaders

Individuals who guide, influence, or direct others towards achieving collective goals, often by inspiring or motivating them.

Burns

Often associated with burns transformational leadership theory, focusing on how leaders can inspire followers to achieve extraordinary outcomes.

Personal Power

The influence and authority a person has derived from their personal attributes or skills, rather than their formal position.