Chapter 7 Crunch time Flashcards
speculation
1
Q
these participants buy & sell for the purpose of making a profit
A
speculators
2
Q
Speculators take long positions (buy futures) when they anticipate…
A
a rise in prices.
3
Q
Speculators take short positions (sell futures) when they anticipate…
A
a decline in prices.
4
Q
How do speculators impact the market?
A
they add liquidity to markets and reduce price volatility
5
Q
half turn commissions are for one transaction whereas round turn commissions include…
A
two transactions (a buy and a sell)
6
Q
Commissions reduce gains but…
A
increase losses.
7
Q
Bond prices and interests rates maintain what kind of relationship?
A
inverse
