The Basis Is Defined as Spot Minus Futures

question 3

Multiple Choice

The basis is defined as spot minus futures.A trader is hedging the sale of an asset with a short futures position.The basis increases unexpectedly.Which of the following is true?

• A) The hedger's position improves.
• B) The hedger's position worsens.
• C) The hedger's position sometimes worsens and sometimes improves.
• D) The hedger's position stays the same.

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Definitions:

Rapport

A relationship characterized by mutual trust and understanding, often considered essential in therapeutic or interpersonal communication contexts.

Personal Story

An individual's unique and subjective account of their life experiences, often highlighting significant events or challenges.

Reflecting Feelings

A counseling technique where the therapist communicates understanding and empathy by mirroring the emotions expressed by the client.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.