Those who invest in derivative instruments with the purpose of increasing rather than decreasing risk are known as:
A)Option traders.
B)Futures traders.
C)Hedgers.
D)Speculators.

Question

Quizplus · Accepted Answer

Those who invest in derivative instruments with the purpose of increasing risk are known as speculators. Unlike hedgers, who use derivatives to protect against risk, speculators use derivatives to take on risk in the hopes of earning higher returns. Option traders and futures traders are subsets of both hedgers and speculators, as they can use derivatives for either purpose.

Those Who Invest in Derivative Instruments with the Purpose of Increasing