Exhibit 1A -Refer to Exhibit 1A

question 3

Multiple Choice

Exhibit 1A.1
$$\begin{array} { c c } \text { Probability } & \text { Rate of Return } \\\hline .15 & - .10 \\.15 & - .20 \\.35 & .00 \\.25 & .15 \\.10 & .15\end{array}$$
-Refer to Exhibit 1A.1.The standard deviation of your expected return from this investment is

• A) 0.001
• B) 0.004
• C) 0.124
• D) 1.240
• E) None of the above

Identify the standardization of futures contracts and its difference from forward contracts.

Recognize basis and basis risk in the context of futures markets hedging.

Understand the mechanics of profit and loss in futures trading.

Grasp the concept of basis and basis risk in futures markets.