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Assuming a speculator believes that the Canadian Dollar (CAD) is likely to appreciate versus the US Dollar and the Mexican Peso (MXN ) is likely to depreciate versus the US Dollar. How can the speculator create a trade without using the US Dollar? Select all the apply
Assuming a speculator believes that the Canadian Dollar (CAD) is likely to appreciate versus the US Dollar and the Mexican Peso (MXN ) is likely to depreciate versus the US Dollar. How can the speculator create a trade without using the US Dollar? Select all the applya. Buy MXN/ CAD
b. Buy CAD/ MXN
c. Sell CAD/MXN
d. Sell MXN/CAD
A speculator expecting the CAD to appreciate versus the MXN should buy CAD/MXN and sell MXN/CAD to reflect their belief in the expected currency movements without involving the US Dollar.If a speculator believes that the Canadian Dollar (CAD) will appreciate against the Mexican Peso (MXN) without involving the US Dollar, they should engage in trades that reflect this view. Since an appreciation of the CAD means that one CAD will buy more MXN, the speculator should buy CAD/MXN. Conversely, because the MXN is expected to depreciate against the CAD, the speculator should sell MXN/CAD. These positions anticipate that the value of the CAD will go up in terms of MXN, making these the appropriate trades for speculation under the given beliefs....