Lee Seong-tae, the governor of the Bank of Korea, believes that the central bank, like others elsewhere, will have to be increasingly alert to the risk of speculative bubbles.
Derivatives are financial instruments whose value is based on some underlying asset, like a mortgage for instance, and and can be used to either hedge risk or for completely speculative positions.
The theory for the very significant discount was based on the risk that a hypothetical speculative buyer would be taking given that the Elkins did not want the artwork to be sold.
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If the U.S. government officials can come to meaningful agreement on taxing and spending matters in the coming weeks, which is still highly debatable, then it would be likely that a heavier flow of speculative money would flow into risk assets.
The concept is to take small positions in a large number of speculative stocks to reduce overall portfolio risk.
But others say this speculative game is simply not worth the risk.
In the retail context hedge funds are considered to represent speculative investments that involve a high degree of risk.
Did the Point Judith II offering documents indicate this investment was highly speculative, illiquid and involved a high degree of risk?
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Which of the offering documents related to the hedge, venture capital and private equity funds in which the pension invests clearly indicate that these investments are highly speculative, illiquid and involve a high degree of risk?
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Finally, the emergence of cloud exchanges for spot trading could lead to a speculative futures market, bringing a whole new approach to risk management.
The answer, Harford finds, is that there are a few small foundations funding more risky, speculative scientific research, but that their funding is dwarfed by the more risk-averse ideas for funding.
In particular, it may be difficult to determine whether principal risk has been retained because (i) the retention of such risk is necessary to provide intermediation and liquidity services for a relevant financial instrument or (ii) the position is part of a speculative trading strategy designed to realize profits from price movements in retained principal risk.
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It is likely that some fresh speculative money that had been on the sidelines is now starting to trickle back into risk assets like raw commodities.
It is likely that fresh speculative money that had been on the sidelines is now starting to flow back into risk assets like raw commodities, albeit at a cautious pace so far in January.
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