Which of the following activities is NOT performed by speculators in the foreign exchange market?

Show Answers

Try to gain from trading based on predictions of future currency valuesTake on risk while trying to outperform the marketPurchase currency at a lower rate and sell it later at a higher rateExecute simultaneous buying and selling of currency to earn a guaranteed, risk-free profit

Explanation

Speculators in the forex market seek to profit by anticipating currency price movements and willingly accept risk. They buy currencies at low prices hoping to sell at higher prices later. However, they do not engage in riskless arbitrage by simultaneously buying and selling currency for guaranteed profits.