Question 26 of 38
Q.Explain Bear Speculator.
Tamil Nadu DgeTamil Nadu HSC (DGE) Commerce Board 2023Subjective· 3mImportance★★★★★
68% · 26/38 Questions
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Start your 14-day free trial to unlock the full solution →A Bear Speculator sells securities expecting prices to fall, planning to buy them back cheaper later and profit from the decline.
A bear is a speculator who is pessimistic about the market and expects security prices to fall. His strategy is:
- He sells securities at the current (higher) price — frequently through a short sale, i.e. selling securities he does not yet own.
- He waits for prices to drop, then buys them back at the lower price to complete the deal.
- His profit is the difference between the higher selling price and the lower buying price. …
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