Economics · Financial Risk Management
Which of the following is the main advantage of using a currency option over a forward contract for hedging exchange rate risk?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1It is cheaper to set up
- 2It allows the company to benefit if the exchange rate moves in its favour✓
- 3It is legally binding and cannot be cancelled
- 4It fixes the exact rate today, removing all uncertainty
Correct answer
It allows the company to benefit if the exchange rate moves in its favour
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Financial Risk Management MCQs →Want more practice questions on Financial Risk Management?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Financial Risk Management