Suppose That Speculators Expect That a War in the Middle

question 157

Essay

Suppose that speculators expect that a war in the Middle East is likely next year, which could cause a significant decrease in the supply of oil.
a. What could the speculators do to profit from their expectation?
b. What would be the possible impact of the war on the oil market without speculation?
c. What would be the possible impact of the war on the oil market with the action taken by the speculators described in part a?
d. How would the action taken by the speculators impact society?

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Definitions:

Variable

Any characteristic whose values can change.

Testable Hypothesis

A prediction that has been formulated specifically enough so that it is clear what observations would confirm the prediction and what observations would challenge it.

Disconfirmed

Disconfirmed means proven to be false or invalid, especially in the context of theories, hypotheses, or beliefs.

Confirmed

Verified or established as true or accurate.