Question: Comparing with options, both forward and futures contracts have a significant drawback that A. cannot protect the holder against the risk of adverse movements in

  1. Comparing with options, both forward and futures contracts have a significant drawback that

    A.

    cannot protect the holder against the risk of adverse movements in exchange rates
    B.

    are more expensive
    C.

    are available only for relatively short maturities
    D.

    eliminate the possibility of gaining a windfall profit from favorable movements in exchange rates

1 points

QUESTION 2

  1. Suppose the exchange rate of euro at current spot market is $1.25/. If a call option has a strike price of $1.28/ then we can say this option is

    A.

    inthemoney
    B.

    outofthemoney
    C.

    atthemoney
    D.

    past breakeven

1 points

QUESTION 3

  1. Suppose the exchange rate of euro at current spot market is $1.25/. If a put option has a strike price of $1.18/ then we can say this option is

    A.

    inthemoney
    B.

    outof-themoney
    C.

    at-the-money
    D.

    past breakeven

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