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a. When a short and a long position in the FX market can incur losses? b. Explain stabilizing speculation in the FX market and illustrate
a. When a short and a long position in the FX market can incur losses?
b. Explain stabilizing speculation in the FX market and illustrate it graphically.
c. What can be the rationale behind a firm going for short-term investment inforeign currency over domestic currency?
d. The following exchange rates are quoted:
GBP/AUD 0.3820-90
AUD/EUR 1.6400-80
Calculate bid and ask rates and their spread on the exchange rate between GBP and EUR expressed in the indirect quotation from a British perspective.
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