Which Statement Is True Regarding a Foreign Currency Option

question 6

Multiple Choice

Which statement is true regarding a foreign currency option?

• A) A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future.
• B) A foreign currency option gives the holder the obligation only sell foreign currency in the future.
• C) A foreign currency option gives the holder the obligation to only buy foreign currency in the future.
• D) A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future.
• E) A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future at the spot rate on the future date.

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Definitions:

Mixed Branding

Refers to a marketing strategy where a company uses multiple brand names for its products or services, catering to different market segments or product lines.

Brand Licensing

A legal agreement where a brand owner permits another party to use its brand, logo, or product names in exchange for a fee or royalty.

Trademark

A distinctive sign, design, or expression that identifies products or services of a particular source from those of others.

Royalty

Royalties are payments made to copyright or patent holders, or to the owners of other types of intellectual property, in exchange for the right to use their work over a period.