The Basic Reason Why Investors Use Spreading Strategies When Speculating

question 69

Multiple Choice

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

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

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Definitions:

Mum Effect

The tendency to avoid communicating unfavorable news to others due to fear of the negative consequences associated with the disclosure.

Encode

The process of converting ideas and thoughts into a communicable form, such as speech, writing, gestures, or another mode of expression.

Withholding Information

The act of intentionally not sharing or providing relevant information in a workplace or personal context.

Written Communication

The exchange of messages or information through written symbols, including emails, reports, and letters.