Question: 4. Currency option and forward contract are two different methods to hedge the risk of foreign exchange. What is INCORRECT about option and forward contract?

4. Currency option and forward contract are two different methods to

4. Currency option and forward contract are two different methods to hedge the risk of foreign exchange. What is INCORRECT about option and forward contract? (2 Points) Option is a right to exchange currency at a future date Forward contract is an obligation to exchange foreign current at a future date Both Option and Forward contract are techniques to hedge the exchange risk only, that give you the right and obligation to exchange foreign currency in future. Both Option and Forward contract give the obligation to exchange foreign currency in future date. Option 2

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