General Studies · Risk Management
Which of the following is a key advantage of using currency options over currency forward contracts?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Options do not require an initial premium payment.
- 2Options are available for longer periods than forward contracts.
- 3Options eliminate the risk of an adverse movement while allowing benefit from a favorable one.✓
- 4Options have lower transaction costs.
Correct answer
Options eliminate the risk of an adverse movement while allowing benefit from a favorable one.
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