Speculators in foreign exchange markets do all of the following except ?
Correct answer: D. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit
- A. attempt to profit by trading on expectations about future currency prices
- B. bear risk as they attempt to ____ beat the market||
- C. attempt to buy currency at a low price and later resell that currency at a higher price
- D. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit
Explanation
Speculators accept exchange-rate risk while trying to profit from expected price movements. Simultaneously buying cheaply and selling at a higher price without risk describes arbitrage, not speculation.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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