A Foreign Exchange Option Is

question 58

Multiple Choice

A foreign exchange option is:

• A) the right to engage in buying or selling on the spot market.
• B) the right to purchase or sell foreign currency at a specified price on a specified date in the future.
• C) when the price of foreign currency exceeds the spot rate.
• D) when a speculator must decide whether to move into the market.

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Definitions:

Diversification

A strategy in finance and business development that involves entering into a variety of markets or developing a range of products to minimize risks.

Product Development

The process of creating, designing, and bringing a new product to market.

Market Development

Market development is a strategic effort to expand into new markets or segments, aiming to increase the customer base for a product or service.

Diversification

A strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.