Which of the Following Statements About the Basis Risk on Futures

question 40

Multiple Choice

Which of the following statements about the basis risk on futures is correct?

• A) Basis risk is often completely eliminated by hedging.
• B) Although the basis fluctuates over time, it can be precisely predicted.
• C) The basis is approximately zero on the maturity date of the contract.
• D) A hedge will reduce risk as long as the basis does not fluctuate.

Recognize the tools used in public relations and their applications.

Understand the advantages and disadvantages of publicity as a promotional tool.

Comprehend the types of sales promotions and their strategic use in marketing.

Understand the role of personal selling and relationship building in marketing.

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Definitions:

Throughput Time

The total time taken for a product to pass through a manufacturing process, from start to finish.

Factory Floor

The area where workers manufacture products or operate machinery, typically within a manufacturing plant or factory.

Warehouse

A storage facility for housing goods in large quantities, typically before they are distributed for sale.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.