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.

---

Definitions:

Master Control

Master control is the main interface or mechanism through which a complex system, such as a machine or network of devices, is operated and managed.

Start Pushbutton

A control device used to initiate the operation of machinery or equipment.

Three-Wire

Describes an electrical system or circuit that uses three conductors for operation, typically including a live wire, neutral wire, and a ground wire.

Motor Starter

An electrical device that controls the use of electrical power to equipment, specifically to start and stop motors.