Strategic Rules on Speculation in the Foreign Exchange Market

Posted: 17 Feb 2000

See all articles by Dilip K. Ghosh

Dilip K. Ghosh

Rutgers, The State University of New Jersey - Management Science & Information Systems

Arun J. Prakash

Florida International University (FIU) - Department of Finance; Florida International University

Abstract

The paper specifies the conditions for profitable speculation in the foreign exchange market with spot and forward contracts. It derives the unique strategic rules from the initial two-choice situations in a given environment. Finally, in a more complex structure involving covered arbitrage, speculative profits are computed with iterative plays.

JEL Classification: F31, G12

Suggested Citation

Ghosh, Dilip K. and Prakash, Arun Jai, Strategic Rules on Speculation in the Foreign Exchange Market. The Journal of Financial Research. Available at SSRN: https://ssrn.com/abstract=201010

Dilip K. Ghosh (Contact Author)

Rutgers, The State University of New Jersey - Management Science & Information Systems ( email )

180 University Ave.
Newark, NJ 07102-1895
United States
973-353-5308 (Phone)
973-353-1233 (Fax)

Arun Jai Prakash

Florida International University (FIU) - Department of Finance ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Florida International University ( email )

Miami, FL 33199
United States

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