Which of the Following Increases Basis Risk

question 4

Multiple Choice

Which of the following increases basis risk?

• A) A large difference between the futures prices when the hedge is put in place and when it is closed out
• B) Dissimilarity between the underlying asset of the futures contract and the hedger's exposure
• C) A reduction in the time between the date when the futures contract is closed and its delivery month
• D) None of the above

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Definitions:

Human Resource Planning

The strategic process by which an organization assesses its current and future workforce needs based on its goals and objectives to ensure the right people are in the right place at the right time.