[Solved] Why does basis risk occur? A)Changes in the spot asset's price are not perfectly correlated with changes in the price of the asset delivered under a forward or futures contract. B)The daily marking-to-market process enables an FI manager to close out a futures position by taking an exactly offsetting position. C)Spot and futures contracts are traded in different markets with different demand and supply functions. D)None of these. E)Changes in the spot asset's price are not perfectly correlated with changes in the price of the asset delivered under a forward or futures contract, and spot and futures contracts are traded in different markets with different demand and supply functions. Dramatic Decline: A rapid and significant drop in the value or price of an asset or market. Naked Strategy: A trading tactic involving the speculative purchase or sale of financial instruments without protective measures to offset potential losses. Long Put: An options strategy where an investor purchases a put option, betting that the underlying asset's price will decline below the strike price before expiration. Collar Strategy: An investment strategy that uses options to limit the range of possible returns, protecting against large losses but also capping large gains.