True and False
1. Options are used to insure an existing portfolio. For example, buying a put on an asset (or portfolio) reduces the risk of loss in case of a drop in value of the asset.
2. In order to hedge the currency risk, an investor can take a position with a foreign exchange contract that offsets the currency exposure associated with the principal invested.
3. US investor investing in Europe can hedge the EURO risk by selling a US dollar future or forward.