Which of the following FX trading activities is used for purposes of speculation?
A)The purchase and sale of foreign currencies for the purpose of profiting from forecasting or anticipating future movements in FX rates.
B)The purchase and sale of foreign currencies to allow customers to partake in and complete international commercial trade transactions.
C)The purchase and sale of foreign currencies for the purpose of offsetting customer exposure in any given currency.
D)The purchase and sale of foreign currencies to allow customers to take positions in foreign real and financial investments.

Question

Quizplus · Accepted Answer

The purchase and sale of foreign currencies for the purpose of profiting from forecasting or anticipating future movements in FX rates is a speculative activity. Speculators attempt to profit from fluctuations in currency prices by buying low and selling high, or vice versa. This activity is not related to international trade or investment, unlike the other options.

Which of the Following FX Trading Activities Is Used for Purposes