Asked by Nathan Tsung on Jul 17, 2024
Verified
An option contract can be based on a foreign currency.
Option Contract
An agreement that gives the holder the choice, but not the obligation, to buy or sell an underlying asset at a set price on or before a certain date.
Foreign Currency
Currency used in a country other than one’s own, reflecting the economic practices and transactions in foreign nations.
- Familiarize yourself with the unique aspects of futures, options, and swaps, including their core principles and goals.
Verified Answer
MG
Manbir GhumanJul 18, 2024
Final Answer :
True
Explanation :
Option contracts can indeed be based on a variety of underlying assets, including foreign currencies. These are known as currency options or forex options, allowing investors to hedge against foreign exchange risk or speculate on currency movements.
Learning Objectives
- Familiarize yourself with the unique aspects of futures, options, and swaps, including their core principles and goals.
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