Speculative purchases of securities and commodities are generally financed by loans from the money market.

Question

Quizplus · Accepted Answer

Speculative purchases in securities and commodities markets are often financed through borrowing from the money market, where short-term loans are available. This is because speculators may not always have the full amount of capital required for their investments and thus rely on leverage to increase their purchasing power.

Speculative Purchases of Securities and Commodities Are Generally Financed by Loans