To purchase a stated number of units of the underlying foreign currency at a specific price per unit during a specific period of time is called a/an
A) put option.
B) market option.
C) call option.
D) operating option.

Question

Quizplus · Accepted Answer

A call option gives the buyer the option (but not the obligation) to purchase the underlying foreign currency at a specific price during a specific period of time. This is a way to protect against potential currency fluctuations and to lock in a favorable exchange rate.

To Purchase a Stated Number of Units of the Underlying