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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