The Basic Reason Why Investors Use Spreading Strategies When Speculating

question 49

Multiple Choice

The basic reason why investors use spreading strategies when speculating in commodities is to

• A) increase profits.
• B) decrease transaction costs.
• C) increase leverage.
• D) reduce risk.

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Definitions:

Interpersonal Communication

The process of exchange of information, feelings, and meaning between two or more people through verbal and/or non-verbal methods.

Self-Correcting Mechanism

A process through which a system naturally adjusts and corrects its course without external intervention, aiming to maintain equilibrium or improve function.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1.

Grapevine

An informal communication network within an organization, characterized by personal conversations and exchanges of information beyond official channels.