|
|
Article: Speculation
- Article from:
- Gale Encyclopedia of U.S. Economic History
CopyrightCOPYRIGHT 2000 The Gale Group Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
SPECULATION
Speculation is an economic term used to describe financial risk taking. For example, an individual investing money in a start-up business venture, where the outcome of profit or loss is unknown, is engaging in speculation. A speculator can calculate a variety of factors and forecast a possible result for an investment, but performance outcomes can never be definitively determined. To continue with the example of a start-up venture, the performance of the new business can be estimated through market studies regarding consumer demand for a product and how that demand is or is not presently being met in the marketplace. The start-up business may predict that its product is ...