Hull_OFOD9e_MultipleChoice_Questions_Only_Ch17

Hull_OFOD9e_MultipleChoice_Questions_Only_Ch17 - Hull...

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Hull: Options, Futures, and Other Derivatives, Ninth Edition Chapter 17: Options on Stock Indices and Currencies Multiple Choice Test Bank: Questions 1. Which of the following describes what a company should do to create a range forward contract in order to hedge foreign currency that will be received? A. Buy a put and sell a call on the currency with the strike price of the put higher than that of the call B. Buy a put and sell a call on the currency with the strike price of the put lower than that of the call C. Buy a call and sell a put on the currency with the strike price of the put higher than that of the call D. Buy a call and sell a put on the currency with the strike price of the put lower than that of the call 2. Which of the following describes what a company should do to create a range forward contract in order to hedge foreign currency that will be paid? 3. What should the continuous dividend yield be replaced by when options on an exchange rate are valued using the formula for an option on a stock paying a continuous dividend yield?
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