Question

What is Speculation?

Hint:

Remember: Speculation = High risk + Profit from price changes.

Answer 1

Concept: Speculation is a financial activity related to buying and selling with the aim of making profit from price changes.
Step 1: Definition.
Speculation refers to the purchase and sale of assets (like securities or commodities) with the intention of earning profit from fluctuations in market prices.
Step 2: Nature.

• High risk
• Based on market expectations
• Short-term profit motive

Step 3: Conclusion.
Thus, speculation involves risk-taking in anticipation of price changes to earn profit.