Question: 8.5) Which three statements regarding options are true? A The seller (writer) of an option has limited potential gains. B A long EUR put option
8.5) Which three statements regarding options are true? A The seller (writer) of an option has limited potential gains. B A long EUR put option incorporates the obligation to sell EUR C A long EUR call option incorporates the right to buy EUR D A long EUR call option with a strike price of 1,4 will have a higher premium than a long call option with a strike price of 1,3. E When used for hedging the potential gains from the hedging option are used to compensate possi-ble losses in the underlying transaction (payable or receivable). This is why an exporter will always hedge with a long EUR put option. F A EUR long call option is also a USD long put option G An option is purchased at the lower ask rate. Please elaborate and explain.
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