Which of the following scenarios would cause a speculator to ―buy low and sell high‖?
A) Farmers expect to have a bumper harvest of corn next year.
B) Imports of corn begin to flood the country.
C) The government is expected to pass legislation making it mandatory for all vehicles to use corn-based fuels within one year.
D) The government is expected to subsidize corn production for farmers.

Question

Quizplus · Accepted Answer

If the government is expected to pass legislation making it mandatory for all vehicles to use corn-based fuels within one year, this would increase demand for corn, leading to higher prices. A speculator would buy low (before the legislation is passed) and sell high (after the legislation is passed and the price of corn goes up).

Which of the Following Scenarios Would Cause a Speculator to ―Buy