Question

#1 (a. Dealers   b. Market makers c, Brokers d. Arbitragers  e. Speculators) bet one side of transaction without necessary risk management.

		a
		b
		c
		d
		e

#2

The J-Curve Adjustment Path means

		The exchange rate will decrease first and then go up during covered interest rate arbitrage
		The interest rate will decrease first and then go up during covered interest rate arbitrage.
		The balance of trades will decrease first and then go up when the local currency devalues.
		The value of firms will decrease first and then go up when the domestic interest rate decreases

#3

About the corporate governance, which is wrong

a. in Anglo-American firms maximization of shareholders’ wealth is the goal.

b. in non-Anglo-American firms all stake holders play roles.

c. Some investors seek short-term profits and some seek long term ones and there exists conflicts.

d. In the non-Anglo-American markets, government intervention may be common.

e. Failures in corporate governance is not important in recent years

		a
		b
		c
		d
		e

Answer 1

1.Speculators are those market participants who are speculating about movement in the price of the security by taking positions in either side of the long or the short position, and not managing their risk because they want their position to get maximum out of their speculation.

These speculators are often trying to bet on upside aur downside of the stock and they are also not managing their risk.

Other options like dealers and market makers along with arbitrageurs and brokers are always doing risk management.

Correct answer would be option (e) speculators.