Currency Speculation Takes Place When

question 38

Multiple Choice

Currency speculation takes place when

• A) there is short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
• B) the exchange rate at which a foreign exchange dealer will convert one currency differs on a particular day.
• C) there is a simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.
• D) the purchase of securities in one market are immediately resold in another to profit from a price discrepancy.
• E) the growth in a country's money supply exceeds the growth in its output, leading to price inflation.

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Definitions:

Rate of Return

The increase or decrease in the value of an investment during a predetermined timeframe, represented as a proportion of the investment's original price.

Dividend Next Year

The projected amount of money to be paid to shareholders from a company's earnings in the forthcoming fiscal year.

EPS Growth Rate

The rate at which a company's earnings per share (EPS) has grown or is projected to grow over a period.

Rate of Return

A measure of the profitability of an investment, expressed as a percentage of the initial investment.