The Basis (B_t,T) at Time T Between the Spot Price

question 94

Multiple Choice

The basis (B_t,T) at time t between the spot price (S_t) and a futures contract expiring at time T (F_t,T) is

• A)B_t,T = S_t + F_t,T
• B)B_t,T = S_t - F_t,T
• C)B_t,T = S_t * F_t,T
• D)B_t,T = S_t/F_t,T
• E)None of the above

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Definitions:

Market Affected

Describes a situation where the dynamics of a market are influenced or altered by external factors, such as policy changes or economic shifts.

Productive Resource

Any input used in the production of goods and services, such as labor, capital, land, or technology.

Average-Cost Curves

Graphical representations that show how the cost per unit of production varies with the level of output, typically U-shaped due to economies and diseconomies of scale.

Quantity Demanded

Represents the total amount of a good or service that consumers are willing and able to purchase at a specific price level.