The FI is acting as a speculator when it
A)buys or sells currency to balance the FI's net exposure.
B)takes a nonzero net position in a particular currency.
C)processes an exporter's transaction in a foreign currency.
D)makes a market in a currency.
E)advises customers on their international business.

Question

Quizplus · Accepted Answer

Taking a nonzero net position in a particular currency, without an offsetting transaction, is an act of speculation. The other choices do not necessarily involve speculation.

The FI Is Acting as a Speculator When It