Question 1

A feature of currency option that distinguishes it from other derivatives is

Accepted Answer

A) It carries premium to be paid up front. 
B) It is optional to enter into the contract. 
C) The buyer has only right, but no obligation to execute the contract 
D) The seller has the right, but no obligation to execute the contract.

Question 2

The marking to market in respect of a currency future refers to

Accepted Answer

A) Putting up for sale specific lot of futures. 
B) Adjusting the margin money of buyer and seller to reflect the current value of futures 
C) Quoting rates for different maturities. 
D) Allotting futures among different brokers.

Exam 1: Foreign Currency Accounts, Exchange Rates, and Derivatives: Exploring the World of Foreign Exchange

A feature of currency option that distinguishes it from other derivatives is

The marking to market in respect of a currency future refers to