Which of the Following Statements Regarding Currency Options Is False

question 37

Multiple Choice

Which of the following statements regarding currency options is false?

• A) Firms often prefer forward contracts to currency options if the transaction they are hedging might not take place.
• B) Currency options are another method that firms commonly use to manage exchange rate risk. Currency options, like the stock options, give the holder the right-but not the obligation-to exchange currency at a given exchange rate.
• C) Currency forward contracts allow firms to lock in a future exchange rate; currency options allow firms to insure themselves against the exchange rate moving beyond a certain level.
• D) Many managers want the firm to benefit if the exchange rate moves in their favor, rather than being stuck paying an above-market rate.

Identify the practical first steps in estate planning.

Describe the characteristics and purposes of various types of trusts, including Testamentary trusts and Credit-Shelter trusts.

Recognize the non-legally binding nature of a letter of last instruction and its potential contents.

Analyze how personal situations impact estate planning.

---

Definitions:

Marketplace

Any venue, physical or digital, where goods, services, or information are exchanged between buyers and sellers.

Consumer's Needs

The fundamental requirements that customers seek to satisfy when they purchase goods or services.

Exchange

The trade of things of value between the buyer and the seller so that each is better off as a result.

Value

The importance, worth, or usefulness of something perceived by someone or the society.