The activities of speculators often reduce the risk borne by other stock market participants.

Question

Quizplus · Accepted Answer

Speculators often take on risk that other market participants are unwilling or unable to take, which can stabilize market prices and reduce overall risk. By buying or selling securities based on their belief about future price movements, speculators can provide liquidity to the market and absorb some of the volatility that might otherwise be experienced by other investors. This can be especially beneficial for long-term investors who are less concerned with day-to-day price swings and more focused on achieving their investment objectives over time.

The Activities of Speculators Often Reduce the Risk Borne by Other