A Speculator in Foreign Exchange Is a Person Who

question 195

Multiple Choice

A speculator in foreign exchange is a person who

• A)buys foreign currency, hoping to profit by selling it at a higher exchange rate at some later date
• B)earns illegal profit by manipulating foreign exchange
• C)causes differences in exchange rates in different geographic markets
• D)simultaneously buys large amounts of a currency in one market and sells it in another market
• E)takes no risks in foreign currency exchanges

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Definitions:

Shirking

Avoiding or neglecting duties, responsibilities, or work, often covertly, to reduce personal effort while still receiving compensations or benefits.

Working Diligently

Refers to the act of putting consistent and earnest effort into one's tasks or duties.

Moral Hazard

A scenario in which an entity is prone to engage in risky behaviors knowing that another party will shoulder the consequences of such risks.

Adverse Selection

Adverse selection also pertains to the tendency of those in dangerous jobs or high-risk lifestyles to acquire life or health insurance to a greater extent than those with lower-risk profiles, thereby distorting the market.