Question
Complete the following tasks that are designed to test your knowledge of speculation in the foreign exchange market. Identify whether each profit-seeking strategy used
Complete the following tasks that are designed to test your knowledge of speculation in the foreign exchange market. Identify whether each profit-seeking strategy used in the foreign exchange market is relevant to a long position or short position, using the following table. Strategy A speculator attempts to realize gains based on the appreciation of a currency "Buy low and sell high" Speculators anticipate that the price of a currency will decrease A speculator sells currency (that they do not own) at a high price then buy it back later at a lower price Speculators anticipate that the price of a currency will increase "Sell high and buy low" Long Position Short Position Assume that the exchange rate between the U.S. dollar and the euro in the Netherlands is currently 1 dollar = 1.24 euros. Suppose you borrow 100,000 dollars in order to purchase euros. At the current exchange rate, you would be able to purchase euros. Suppose that in one month, the dollar has depreciated in value, so that now 1 dollar = 1.178 euros. As a result of the dollar's depreciation, you can sell your euros to receive dollars. Overall, your position in led to a
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