For which of the following reasons do investors use the foreign exchange market?

Question

Quizplus · Accepted Answer

Investors use the foreign exchange market for all of the above reasons - currency hedging, currency speculation, currency arbitrage, and currency conversion. Currency hedging involves using the foreign exchange market to protect against potential losses from fluctuations in currency exchange rates. Currency speculation involves attempting to profit from changes in currency exchange rates. Currency arbitrage involves taking advantage of price differences between currencies in different markets. And currency conversion involves exchanging one currency for another for the purpose of financial transactions.

For Which of the Following Reasons Do Investors Use the Foreign