Why Is a Currency Option Sometimes Preferred to a Forward

question 73

Multiple Choice

Why is a currency option sometimes preferred to a forward market hedge?

• A) It is an optional contract, so the company could not exercise it and be able to benefit from upside swings in the foreign currency value.
• B) The rates are cheaper.
• C) Currency options are available for longer periods.
• D) The IRS favors currency options for tax credits when they are exercised.

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Car Industry

the global business sector involved in the manufacturing, design, development, marketing, and selling of motor vehicles, including cars, trucks, motorcycles, and related services.

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The process of mailing advertisements to a large number of people over an extended geographic area.

Prospects

Potential customers or clients who are considered likely to purchase a product or service based on their needs, abilities, and interests.

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Individuals or entities that have significant sway or impact within a community or market, often guiding the opinions of others.