Embedded Derivative

Simple embedded derivatives are in syllabus for June, but not afterwards. Very rarely tested. No calculations tested to date. "Seltec has also entered into a long-term arrangement to buy oil from a foreign entity whose currency is the dinar. The commitment stipulates that the fixed purchase price will be denominated in pounds sterling.” Host contract is purchase of oil Embedded derivative is some sort of currency derivative (pounds/ dinars). Remember that derivative = betting = gambling. :)