The Risk That Arises Because the Value of a Futures

question 26

Multiple Choice

The risk that arises because the value of a futures contract will not be perfectly correlated with the firm's exposure is called ________.

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

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Definitions:

Coccidioides Immitis

A fungus that can cause coccidioidomycosis, also known as Valley fever, which is a disease that affects the lungs and can spread to other parts of the body.

Protist

A diverse group of eukaryotic microorganisms, which are neither plants, animals, nor fungi, and share some characteristics with those groups.

Eukaryotic

Referring to cells that contain a nucleus and other organelles enclosed within membranes, characteristic of all life forms except bacteria and archaea.

Single Cell

Pertaining to an organism or entity that consists of only one cell, often referring to unicellular organisms.