In reference to the futures market,a "speculator"
A)attempts to profit from a change in the futures price.
B)wants to avoid price variation by locking in a purchase price of the underlying asset through a long position in the futures contract or a sales price through a short position in the futures contract.
C)stands ready to buy or sell contracts in unlimited quantity.
D)wants to avoid price variation by locking in a purchase price of the underlying asset through a long position in the futures contract or a sales price through a short position in the futures contract,and also stands ready to buy or sell contracts in unlimited quantity.

Question

Quizplus · Accepted Answer

A speculator is someone who takes on risk in the market in an attempt to profit from a change in price. They do not necessarily want to lock in a purchase or sales price, but rather are looking to make a profit from price movements.

B is incorrect because this describes a hedger, who uses futures contracts to protect against price fluctuations.

C and D are incorrect because standing ready to buy or sell contracts in unlimited quantity is the role of a market maker, not a speculator.

In Reference to the Futures Market,a "Speculator