Business and Personal Finance Dictionary

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• CROSS CURRENCY OPTION
  
  Definition: An option to exchange units of one currency for units of another, as seen from the point of view of a third currency. A Margrabe Option (q.v.) with underlying currency risk. Example: A New York trader might consider an option to pay 1.5 DEM for 100 JPY as a Cross Currency Option. A trader in Frankfurt might call that a call on yen. A trader in Tokyo might consider it a put on Deutschemarks.
  
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