Question

Which type of option helps the importer to hedge risks of exchange rate? A. Put option B. All names are not correct c. Call option d. Call option and put option

Answer 1

Call option and put option ( D )

Explanation:

During hedging in stock/financial markets both the Call and put option can be used to hedge the trading position of the trader against the change in exchange. This is because the call or put option is used depending on the initial position of the trader.

Call option is used when the trader is currently holding a short position

Put option is used when the trader is currently holding a long position