40-)

Don works for the currency trading unit of a large bank in London. He speculates that in the coming months the dollar will rise sharply vs. the pound. What should Don do to act on his speculation?

Select one:

a. Buy a put on the pound.

b. Sell a put on the pound.

c. Sell a call on the pound.

d. Buy a call on the pound.

1-)

Most option profits and losses are realized through taking actual delivery of the currency rather than offsetting contracts.

Select one:

True

False

2-)

Like a forward market hedge, a money market hedge also involves a contract and a source of funds to fulfill that contract. In this instance, the contract is a loan agreement.

Select one:

True

False