Which of the Following FX Trading Activities Is Used for Purposes

question 4

Multiple Choice

Which of the following FX trading activities is used for purposes of speculation?

• A)The purchase and sale of foreign currencies for the purpose of profiting from forecasting or anticipating future movements in FX rates.
• B)The purchase and sale of foreign currencies to allow customers to partake in and complete international commercial trade transactions.
• C)The purchase and sale of foreign currencies for the purpose of offsetting customer exposure in any given currency.
• D)The purchase and sale of foreign currencies to allow customers to take positions in foreign real and financial investments.

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Definitions:

Portfolio Risk

The uncertainty or potential for financial loss in an investment portfolio due to market volatility.

Constant

A fixed value that does not change in a particular context or mathematical equation.

M-Squared Measure

A performance metric that measures the return of a portfolio, adjusted for risk, compared to a benchmark.

Risk-Adjusted Return

A measure of an investment's return that accounts for the level of risk taken, allowing for the comparison of investments with different risk levels.