Which scenario 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 passes legislation that requires all vehicles to use corn-based fuels within a year, the demand for corn will likely increase, causing the price to rise. A speculator can buy corn now while the price is low and sell it later when the price rises, gaining a profit. This is a classic "buy low, sell high" scenario.

Which Scenario Would Cause a Speculator to "Buy Low and Sell