Question

A foreign currency ___________ is a contract giving the purchaser (the buyer) the right, but not the obligation, to buy or sell a given amount of foreign exchange at a fixed price per unit for a specified time period (until the maturity date). The ________________________, is the cost of the option

Answer 1

The correct answer is: Option; premium or option price.

Step-by-step explanation:

As the name implies, an option refers to the right that is given to a potential buyer of capital goods to exercise currency trading within a specified time and amount. To carry out this process, an in-depth study must be carried out in order to make the best investment decision, for the benefit of both parties.

For its part, the price of the premium or option refers to the amount paid by the buyer in order to exercise the legitimate right over the capital asset. The premium corresponds to the value paid in excess and that represents a higher value for the seller within market estimates.