In international finance, speculation involves: ·
a. not being able to make a commitment to buy or sell.
b. taking a risk by purchasing (or selling) a foreign currency asset,holding it in anticipation of a rate increase (decrease).
c. simultaneously buying several currencies to ensure that at least one will rise in value.
d. avoiding risk of loss by offsetting an obligation to buy a foreign currency by locking in a contract to sell it at the same time.
Answer: b. taking a risk by purchasing (or selling) a foreign currency asset,holding it in anticipation of a rate increase (decrease).
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