Question: 4. A volatility smile such as that seen for foreign currency options can be caused by (Circle two) (a) The fact that currencies are lIaded

4. A volatility smile such as that seen for foreign currency options can be caused by (Circle two) (a) The fact that currencies are lIaded in different countries at different times of the day (b) The fact that volatility is not constant (c) The fact that the activities of central banks causes occasional jumps in the exchange rate (d) The fact that interest rates may be different in the two countries

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