Compare and Contrast Foreign Currency Options and Futures

question 86

Essay

Compare and contrast foreign currency options and futures. Identify situations when you may prefer one vs. the other when speculating on foreign exchange.

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Definitions:

Operating Assets

Resources employed in a business's regular activities for income generation, such as money, stock, and machinery.

Static Budget

A fixed budget that does not change or adjust over the budget period, irrespective of changes in actual activity levels.

Manufacturing Costs

All expenses directly involved in the production of a product, including raw materials, labor, and factory overhead.

Administrative Expenses

Overhead or operational expenses not directly tied to the production of goods or services, such as salaries of office staff and utilities.