ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Speculation is the act of buying or selling assets that have an increased chance of significant losses. Speculation is common among investors who trade penny stocks and over-the-counter (OTC) investments. Speculation should be limited to ensure that long-term financial goals like retirement are not impacted.

Detailed explanation-2: -Speculators use their own money (or sometimes, borrowed money) and invest it in bonds, equity, money market, foreign exchange and other financial instruments for a short period of time. Some people might confuse speculation with gambling but there’s a huge difference between them.

Detailed explanation-3: -Penny Stocks The vast majority of penny stocks will instead provide you with substantial volatility, unpredictability, and big losses if you are not careful. Stocks that trade on OTC Pink market typically have little working capital and often provide scant information to investors about their financial condition.

Detailed explanation-4: -While the product names and descriptions can often change, examples of high-risk investments include: Cryptoassets (also known as cryptos) Mini-bonds (sometimes called high interest return bonds) Land banking.