n NISM Certifications
XV NISM Series XV
Medium

The act of buying or selling an asset with the expectation of short-term gains from price changes is called:

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Arbitrage

  2. Speculation

    Correct answer

  3. C

    Hedging

  4. D

    Investing

Why this is the answer

Speculation focuses on short-term profits from price fluctuations. Unlike long-term investing, which aims at growth or value creation, speculation is riskier and relies on market timing. Arbitrage exploits price differences across markets, and hedging seeks to reduce risk; neither is focused on short-term price gains.

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