CIMA F3 - Top 3 Tips From The Experts!

[@charlottecliff-atkins3581]

Asun appears to be in the UK so surely his call option would be for the right to buy Dollars and the put option would be to sell Euros?

[@team_astranti]

Hi Charlotte, this is a fair point, but I wouldn't worry about guessing where the person is based unless it is explicitly stated. In this case, it isn't, so you have to go on the information provided. The wording of the question implies selling dollars and buying euros.

[@АлишерМомбаев]

13:05 - Buy low, Sell high rule, isn't it?

[@team_astranti]

Hi there, thanks for the question! In this case it's a little more complex than that. We're hedging using call and put options, so you will have to go through the options to see which gets the best return. Obviously, you want to buy low and sell high, but that principle alone doesn't solve the question.