Which one of the following statements regarding "basis" is true?
A) the basis is the difference between the futuresprice and the spot price.
B) the basis risk is borne by the hedger.
C) a short hedger suffers losses when the basis decreases.
D) the basis increases when the futures price increases by more than the spot price.
E) A,B and D.
Correct Answer:
Verified
Q14: A trader who has a _ position
Q81: Describe the differences between futures and forward
Q82: You sold one oil future contract at
Q83: On January 1,the listed spot and futures
Q84: You purchased one oil future contract at
Q84: Discuss marking to market and margin accounts
Q87: If you determine that the DAX-30 index
Q88: If you determine that the DAX-30 index
Q90: You purchased the following futures contract today
Q91: Describe the types of traders that are
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents