Assuming a flat yield curve in both currencies, when quoting a 1- to 2-month forward FX time option price in a currency pair trading at a discount to a customer:

Question

Options

• Ayou would take as bid rate the bid side of the 2-month forward and as offered rate the offered side of
• Byou would take as bid rate the offered side of the 2-month forward and as offered rate the bid side of
• Cyou would take as bid rate the offered side of the 1-month forward and as offered rate the offered side
• Dyou would take as bid rate the bid side of the 1-month forward and as offered rate the bid side of the

• A
  83% (38)
• B
  11% (5)
• C
  2% (1)
• D
  4% (2)

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