Which of the following statements concerning speculators is true?

Question

Quizplus · Accepted Answer

Speculators enter the foreign exchange market in the hope of making a profit by buying a currency at a lower price and selling it at a higher price in the future. This involves taking on risk, as exchange rates can fluctuate unpredictably. Therefore, statement A is false. Speculators do not simultaneously buy and sell a currency in different markets, as this describes the activity of arbitrageurs (B is incorrect). Speculators do impact exchange rates, as their buying and selling activity can influence supply and demand for a currency in the market (D is false). Finally, while there may be some overlap in the activities of speculators and arbitrageurs, they are not exactly the same (E is incorrect).

Which of the Following Statements Concerning Speculators Is True