A speculator's objective is to
A) reduce pre-existing risks.
B) take delivery of the underlying.
C) take advantage of information asymmetry.
D) maximize potential returns by being exposed to greater risks.

Question

Quizplus · Accepted Answer

A speculator is someone who takes on higher risks in order to potentially achieve greater returns. Their objective is to maximize potential returns, even if it means being exposed to greater risks. They may take advantage of information asymmetry, but this is not their primary objective. They do not typically seek to reduce pre-existing risks, and taking delivery of the underlying is more often the objective of a hedger.

A Speculator's Objective Is to