Which of the following is a speculation strategy?
A) An airline going long oil futures.
B) A cereal company purchasing corn in the spot market.
C) An auto manufacturer longing steal futures.
D) A hedge fund shorting index futures.

Question

Quizplus · Accepted Answer

Speculation involves taking a position in the market with the expectation of profiting from fluctuations in the price of assets. A hedge fund shorting index futures is engaging in speculation, as it is betting on the decline of market indices to make a profit, without necessarily having a direct stake in the underlying assets for business operations.

Which of the Following Is a Speculation Strategy