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Currency options

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Currency options

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • January 31, 2021 at 3:54 pm #608692
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    “Branches of foreign banks in major financial centres are generally willing to write options against their home currency.
    – e.g. Australian banks in Chicago will write options on the Australian dollar.”

    Sir I do not understand the why behind foreign banks willingness to write options against their own currency?

    February 1, 2021 at 7:34 am #608718
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54738
    • ☆☆☆☆☆

    Why not? They will understand their own currency and most of their customers are likely to be either based in their home country are will be companies doing dealings with the country.

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