Asked by
Lakshya Varshney
on Dec 02, 2024Verified
People speculate on exchange rates for profit rather than for doing international business; however, speculative transactions are never large enough to affect the overall supply and demand for a foreign currency.
Speculate
To engage in a financial transaction with a high risk of losing value but also the potential for substantial gains.
Exchange Rates
The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of another.
Foreign Currency
Money or other forms of payment used in international trade that are issued by foreign governments.
- Comprehend the reasons behind and the impact of speculative transactions on exchange rates.
Verified Answer
KY
Learning Objectives
- Comprehend the reasons behind and the impact of speculative transactions on exchange rates.