What is the primary difference between speculation and arbitrage in the foreign exchange market?

Question

Quizplus · Accepted Answer

Speculative transactions involve taking on risk with the hope of profiting from future changes in prices, and they are separated by time. Arbitrage, on the other hand, seeks to exploit price differences in concurrent markets and is considered risk-free if executed perfectly, as it involves simultaneous buying and selling to capture risk-free profits.

What Is the Primary Difference Between Speculation and Arbitrage in the Foreign