An Option Where the Holder Has the Right to Buy

question 35

Multiple Choice

An option where the holder has the right to buy foreign currency from the writer of the option is a

• A) forward option.
• B) put option.
• C) call option.
• D) swap option.

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Definitions:

Less Elastic

Refers to a situation where a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Less Elastic

Describes demand that is relatively insensitive to price changes, indicating consumers do not reduce purchase quantities significantly when prices increase.

Price Sensitive

Referring to the degree to which the demand for a product changes with a change in its price.

Cost Of Overpricing

The negative impacts, such as reduced sales and loss of market share, that can occur when a product is priced too high.