Arbitrage, hedging, and speculation : the foreign exchange market

Author / Creator

Clark, Ephraim, professor

Available as

Online

Summary

Explains arbitrage, hedging, and speculation from the standpoint of a participant in the foreign exchange market-whether an individual trader or an institutional trader-who possesses analytical ski...

Explains arbitrage, hedging, and speculation from the standpoint of a participant in the foreign exchange market-whether an individual trader or an institutional trader-who possesses analytical skill, economically sound judgment, and who has access to market data. In the foreign exchange market, arbitrage involves the simultaneous purchase and sale of a currency in different markets; the profit comes from the difference in the buying and selling prices. Hedging and speculation are opposing strategies for dealing with risk; hedging is a cover, and speculation is an assumption of risk. Authors a

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