Presented by: Group 10 – Batch 2010-12
- Speculation: Assumption or Contemplation or consideration of a subject.
- “In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum”
- Speculation can cause prices to deviate from their intrinsic value if speculators trade on misinformation, or if they are just plain wrong. This creates a positive feedback loop in which prices rise dramatically above the underlying value or worth of the items. This is known as an economic bubble.