Commerce WAEC

Buying and selling stocks in the stock exchange in anticipation of changes in the share price is?

A. hedging
B. projection
C. forecasting
D. speculation

Correct Answer: Option D

D. speculation

Explanation

Speculation refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value. it is a situation where players in the stock exchange buy or sell securities with the expectation that they mabe a fall or rise in the prices of the said securities in future.

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