In the Context of Managing Exchange Rate Risks, Which of the Following

Multiple Choice

In the context of managing exchange rate risks, which of the following statements is true of an option?

A) An option is similar to a forward contract that does not allow for purchase of currency from a bank.
B) A trader uses an option to buy and sell currencies at different exchange rates on the same day.
C) A trader planning to purchase an option is compulsorily required to couple a spot transaction with a forward transaction.
D) Even after purchasing an option, it is not an obligation to buy a certain amount of currency at a given exchange rate.