Explain Why for Speculation, the Purchase of an Option May

question 71

Essay

Explain why for speculation, the purchase of an option may be more attractive than a futures contract or the outright purchase of the underlying asset.

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Definitions:

Per Capita Income

The average income earned per person in a given area (city, region, country) in a specified year.

Currency Exchange Rates

The value of one currency for the purpose of conversion to another, which plays a crucial role in international trade and finance.

Global Marketplace

An interconnected market beyond national borders where goods, services, and currencies are exchanged worldwide.

Cultural Diversity

The existence of a variety of cultural or ethnic groups within a society, celebrating differences in heritage, language, traditions, and values.