Which of the Following Statements Regarding Currency Options Is FALSE

question 27

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.

Interpret regression analysis summaries, including R-square, adjusted R-square, and significance levels.

Determine the significance of regression coefficients and their implications on the dependent variable.

Analyze how various factors affect a dependent variable through multiple regression models.

Evaluate the significance of individual explanatory variables using t-tests and F-tests in regression analysis.

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