An increase in the spot rate will cause an increase in the


1- Which of the statements is true?

a- An increase in the spot rate will cause an increase in the price of a put option.

b- An increase in the strike price will cause an increase in the price of a call option.

c- An increase in the foreign interest rate will cause an increase in the price of

d- Two of the above

e- None of the above

2- Which of the following is true?

a- A forward is the same as a short call and a long put.

b- A call option on one currency is the same as a put option on the other currency.

c- Options on spot and futures are essentially the same.

d- B and c only are true.

e- A, b, c are true.

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Financial Management: An increase in the spot rate will cause an increase in the
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