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Derivatives have been in the news for the last year or two, and one of the derivatives that have been seen as more risky than average have been options. Are options necessarily risky? Do they enhance a risk position or do they just enable you to take the risks that you want to take – by either enhancing or limiting risk or just changing risk?
The format of this quiz is such that the start of each question forms a mini briefing or summary learning resource on the topic. The questions, diagrams and the worked answers and explanations go on to provide yet more information so that in combination it helps your understanding and learning on the subject. Not all companies use options but in order to assess their relevance treasurers should be aware of the extent to which options adjust your risk profile. This quiz and extended narrative should help you appreciate just how options work.
