n NISM Certifications
NSM General NISM
Medium

An action which may result in either profit or loss in future is known as ________.

Practice question from NISM Series IV - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Hedging

  2. B

    Diversification

  3. C

    Risk Insurance

  4. Speculation

    Correct answer

Why this is the answer

Speculation involves taking a position in the market with the expectation of profit, carrying the risk of loss.

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