Which One of the Following Statements Regarding "Basis" Is Not

question 84

Multiple Choice

Which one of the following statements regarding "basis" is not true?

• A) The basis is the difference between the futures price and the spot price.
• B) The basis risk is borne by the hedger.
• C) A short hedger suffers losses when the basis decreases.
• D) The basis increases when the futures price increases by more than the spot price.

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Definitions:

Referent Power

A form of influence based on the attraction or admiration one person has for another, often because of the latter's charisma or likability.

Coercive Power

Coercive power is the ability to control others through the threat of punishment or the imposition of unpleasant consequences.

Approach-Inhibition Model

A psychological theory that explains how power within social hierarchies can influence individuals’ behaviors, either encouraging or inhibiting actions.

Express More Negative Emotions

The act of displaying or expressing feelings that are considered undesirable or pessimistic more frequently.