Question: Explain the Speculation process in the case of the expectation of the depreciation of a given currency against another one and illustrate it with the

Explain the Speculation process in the case of the expectation of the depreciation of a given

currency against another one and illustrate it with the following data:

-Exchange rate between currency 1 and currency 2 is set to 1 at the beginning and you expect a depreciation of 10% of one of the two currencies.

Why we call this Speculation process a risky one? What are the differences with a triangular arbitrage? Explain.

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