True regarding currency options

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Reference no: EM131593851

1. Which of the following are true regarding currency options?

a- Option premiums deteriorate at a decreasing rate as they approach maturity.

b- The majority of the option premium is lost in the final thirty days prior to expiration

c- A reader will find shorter maturities to be better values.

d- Two of the above

e- None of the above

2. The price of a European type call option must be equal to or_______

a- Greater than the present value of the spot price minus the present value of the exercise price.

b- Less than the present value of the spot price minus the present value of the exercise price.

c- Greater than the present value of the spot price minus the present value of the forward price.

d- Less than the present value of the spot price minus the present value of the forward price.

e- None of the above

Reference no: EM131593851

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