The Risk That the Firm Will Not Have,or Be Able

question 12

Multiple Choice

The risk that the firm will not have,or be able to raise,the cash required to meet the margin calls on its hedges is called:

• A)liquidity risk.
• B)basis risk.
• C)commodity price risk.
• D)speculation risk.

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Definitions:

Dissociation

A mental process that causes a lack of connection in a person's thoughts, memory, and sense of identity, often as a response to trauma or stress.

Empathy

The ability to understand and share the feelings of another, putting oneself in their shoes, and recognizing their emotional states.

Guilt

A feeling of having done wrong or failed in an obligation.

Splitting Off

A psychological defense mechanism where individuals may separate conflicting thoughts or emotions into distinct, compartmentalized areas of their psyche.