Which of the Following Statements Concerning Speculators Is True

question 218

Multiple Choice

Which of the following statements concerning speculators is true?

• A)There is no risk involved in speculative activity.
• B)They simultaneously buy and sell a currency in different markets.
• C)They hope to profit by trading a currency at a different exchange rate later.
• D)Their actions do not affect exchange rates.
• E)Their actions are exactly like those of arbitrageurs.

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Definitions:

Permanent/Temporary

Denotes the duration of financial accounts or business strategies: "permanent" indicates long-term endurance, while "temporary" suggests a short-term or temporary existence.

Amortization

The process of gradually writing off the initial cost of an intangible asset over a period of time, reflecting its consumption, expiration, or decline in value.

Estimated Useful Life

Estimated Useful Life is the expected time period over which a fixed asset is projected to be usable for its intended purpose, affecting depreciation calculations.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, determining the account's increase direction.