U.S. History STAAR ( State of Texas Assessments of Academic Readiness) Practice Test

Who is described as a speculator?

1. Someone who avoids financial risks

2. A person who invests in high-risk ventures for profit

3. A financial advisor for safe investments

4. Individuals who lend money without interest

The correct answer is: A person who invests in high-risk ventures for profit

A speculator is best described as a person who invests in high-risk ventures with the expectation of making a profit. This type of investor is willing to take on considerable risk in hopes of significant financial rewards, often making investments in commodities, stocks, real estate, or other assets that may fluctuate widely in value. Speculators play a crucial role in the economy by providing liquidity and capital, facilitating price discovery, and enabling the market to function more efficiently. The other descriptions do not align with the concept of speculation. Avoiding financial risks is contradictory to the very essence of speculating, as speculators actively seek out opportunities that carry uncertainties. Financial advisors focused on safe investments typically steer clients toward low-risk options rather than high-risk ones, which is the opposite of the speculator's approach. Lastly, lending money without interest relates more to charitable actions or community lending practices, rather than the profit-focused nature of speculation. Thus, the definition of a speculator is clearly captured by the idea of engaging in high-risk investments for potential profit.