A Farmer Expects to Harvest 800,000 Bushels of Corn

question 13

Multiple Choice

A farmer expects to harvest 800,000 bushels of corn.To eliminate price risk,the farmer elects to short corn futures.What would cause the farmer to short only 720,000 bushels of corn?

• A) Basis risk
• B) Illiquid futures markets
• C) Margin requirements
• D) Quantity uncertain

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Definitions:

Rote Rehearsal

A memorization technique based on repetition, where information is repeatedly gone over in the same form to be remembered.

Cueing

The process of signaling or prompting that takes place to guide behavior, attention, or processing towards a specific target or direction.

Shadowing

A technique used in cognitive psychology and language learning where a participant repeats speech immediately after hearing it to study attention and language processing.

Short-term Memory

The ability to keep a limited quantity of data in a state of immediate accessibility for a brief duration.