Arbitrage, Hedging, and Speculation: The Foreign Exchange Market

(Hardback)

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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. The authors also discuss futures, swaps, forward contracts, and other strategies.

Author Bio

Dilip K. Ghosh is Professor of Finance at Rutgers University in New Jersey and serves as Kuala Lumpur Stock Exchange Chair Professor of Finance at Universiti Utara, Malaysia. He is also the editor of the International Journal of Finance.