_____ is not a characteristic of speculation.Select one:a.Hedgingb. Risk takingc.Profit motived.Exchange rate fluctuation
Question
_____ is not a characteristic of speculation.
Select one:
- a. Hedging
- b. Risk taking
- c. Profit motivated
- d. Exchange rate fluctuation
Solution
To answer the question, we need to identify which option is not a characteristic of speculation.
The options given are: a. Hedging b. Risk taking c. Profit motivated d. Exchange rate fluctuation
We need to determine which of these options does not align with the characteristics of speculation.
Hedging is a strategy used to minimize risk and protect against potential losses. This aligns with the concept of speculation, as it involves taking positions in the market based on expectations of future price movements. Therefore, hedging is a characteristic of speculation.
Risk taking is an inherent aspect of speculation. Speculators willingly take on risks in the hope of making profits. Therefore, risk taking is a characteristic of speculation.
Profit motivation is a key driver of speculation. Speculators engage in market activities with the goal of making profits. Therefore, profit motivation is a characteristic of speculation.
Exchange rate fluctuation refers to the changes in the value of one currency relative to another. While exchange rate fluctuations can be a factor that speculators consider when making investment decisions, it is not a characteristic of speculation itself.
Therefore, the correct answer is d. Exchange rate fluctuation.
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