Chapter 02 · Section 2.1

Fall In Exchange Rates

Suppose that Victor expected a strong fall in the exchange rate.

What kind of option would he purchase?

• a) Call options.
  No. A call option gives its holder the right to buy the underlying asset at the specified exercise price. If the price of the underlying asset rises, the holder of a call option realizes a profit. He does not profit from a fall in
  b) Put options
  c) Calls or puts

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