A Currency Futures Option Amounts to a Derivative on a Derivative

question 90

Multiple Choice

A currency futures option amounts to a derivative on a derivative. Why would something like that exist?

• A)For some assets, the futures contract can have lower transactions costs and greater liquidity than the underlying asset.
• B)Tax consequences matter as well, and for some users an option contract on a future is more tax efficient.
• C)Transactions costs and liquidity.
• D)All of the above

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Promises or commitments to donate a specific amount of money to a charity or for a philanthropic cause.

Bankruptcy

A legal process for individuals or entities that are unable to repay their debts, allowing for a reorganization or elimination of debt under the protection of the law.

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Capable of being imposed or carried out by legal action or authority; describes a rule, contract, or law that can be legally upheld.

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In contract law, referring to an exchange that parties agree upon, which forms the basis for a legally enforceable contract.