One Difference Between Arbitrageurs and Speculators Is That

question 52

Multiple Choice

One difference between arbitrageurs and speculators is that

• A)arbitrageurs buy and sell foreign exchange; speculators do not
• B)speculators only buy foreign exchange but do not sell it
• C)arbitrageurs take more risks than do speculators
• D)speculators take more risks than do arbitrageurs
• E)arbitrageurs buy foreign exchange in the hope that its value will increase

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Definitions:

Type I Error

The incorrect rejection of a true null hypothesis, also known as a "false positive".

F-test Statistic

A ratio of two variances that follows an F-distribution, used to compare statistical models or test hypotheses about the equality of variances.

Larger Sample Variance

Refers to a greater dispersion or spread of a set of sample data points from their mean, compared to another set of data points.

F-test

A statistical test used to compare the variances of two populations and is based on the F-distribution.