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How to know that,,,whether we have to use call option/futures or put option/futures when contract size is not given in exchange rate risk management.i am much confused in this.
The contract size itself is only relevant if they are traded options (as is usually the case), but if they are OTC options then there is no fixed size contract.
However there has never ever been an exam question where it has not been made clear what currency the options are in (and there never will be a question where it is not made clear).
If you are having problems with a specific past exam question (or a question in the current edition of the BPP Revision Kit) then if you tell me which question then I will explain 🙂
Thanx for your reply,
I was talking about March 2017 Q4 .,,,unfortunately this past exam is not available on acca website yet.
there was no contract size or information given about currency.
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