How does arbitrage differ from speculation?
A)Speculation, unlike arbitrage, is never used to protect against risk.
B)A speculator buys or sells foreign currency with the hope that that currency will either weaken or strengthen in the future, resulting in a profit.
C)Speculation is the purchase of foreign currency on one market for the immediate resale on another market.
D)Arbitrage is another way to speculate for profit or protect against risk.

Question

Quizplus · Accepted Answer

Arbitrage involves taking advantage of price differences between markets without speculation on price movements, while speculation involves buying or selling with the hope of profiting from future price changes.

How Does Arbitrage Differ from Speculation