In 1987, currency speculator Andy Krieger made a lucrative currency trade.Believing that the New Zealand dollar was overvalued, Krieger bet on its fall, selling hundreds of millions of dollars at a time and pushing its value down.He profited by re-buying New Zealand dollars when the price bottomed out.What Krieger was engaging in was a(n)
A) discount position.
B) premium position.
C) short position.
D) long position.

Question

Quizplus · Accepted Answer

Krieger was engaging in a short position, where he sold a currency he believed was overvalued with the expectation of buying it back at a lower price and profiting from the difference.

In 1987, Currency Speculator Andy Krieger Made a Lucrative Currency