Which One of the Following Methods of Setting Prices Would

question 104

Multiple Choice

Which one of the following methods of setting prices would reduce the transactions exposure for both the buyer and seller of a swap contract?

• A) Setting a permanent price at which a commodity will be traded.
• B) Setting the price at the minimum spot price during a given period of time.
• C) Setting the price equal to the spot price on the delivery date.
• D) Using the average market price over a given period of time.
• E) Setting the contract price equal to some percentage, less than 100 percent, of the market price on any given day.

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