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B. FALSE
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NEW QUESTION: 3
[According to the PRMIA study guide for Exam 1, Simple Exotics and Convertible Bonds have been excluded from the syllabus. You may choose to ignore this question. It appears here solely because the Handbook continues to have these chapters.] Which of the following describes a 'quanto' instrument:
A. correlation products
B. any two asset instrument in which one asset is a foreign currency
C. any two asset hybrid instrument
D. options on options
Answer: B
Explanation:
Explanation
A quanto is any instrument in which one asset is a foreign currency. Examples include any option on a foreign currency asset with the strike price in foreign currency, and an option on a foreign currency asset with the foreign currency risk hedged.
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