Refer to the Graph Shown

question 146

Multiple Choice

Refer to the graph shown. In equilibrium, total surplus is equal to:

• A) 600.
• B) 1,200.
• C) 1,400.
• D) 2,000.

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Definitions:

Futures Price

The agreed-upon price for the purchase or sale of an asset at a future date in a futures contract.

Spot Price

The current market price at which an asset, such as securities, commodities, or currencies, can be bought or sold for immediate delivery.

Basis Risk

The possibility that a futures contract's price won't align with the movements of the underlying asset's price, resulting in potential financial losses during hedging activities.