What is the primary purpose of foreign-currency options?

The primary purpose of foreign-currency options is to exchange currencies at specified rates, which aligns with the correct answer. Foreign-currency options provide the holder the right, but not the obligation, to buy or sell a specified amount of foreign currency at a predetermined exchange rate within a specific time frame. This allows businesses and investors to protect themselves from unfavorable currency movements, ensuring that they can exchange currencies under agreed-upon conditions, thus facilitating risk management in foreign exchange transactions.

While other choices mention related concepts, they do not accurately capture the primary function of foreign-currency options. For instance, insuring against price fluctuations may suggest a broader approach to risk management but does not specifically address the mechanics of currency exchange that options provide. Tracking currency market trends is more about analysis rather than the functional purpose of the options themselves. The notion of minimizing currency risk is a consequence of using the options, but it does not describe the option's inherent role involving predetermined rates for currency exchange. Thus, the correct answer focuses on the core capability of foreign-currency options in facilitating precise currency exchanges based on prior agreements.