At Contract Maturity the Basis Should Equal ___________

question 12

Multiple Choice

At contract maturity the basis should equal ___________.

• A) 1
• B) 0
• C) risk-free interest rate
• D) -1

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Definitions:

Passive Strategy

An investment approach that involves holding a diversified portfolio to match the performance of a market index over time, minimizing buying and selling actions.

After-tax Holding-period Return

The return on an investment after accounting for taxes, over the period it was held, reflecting the true gain or loss.

Personal Trusts

Financial instruments in which assets are held by a trustee for the benefit of the trust's beneficiaries according to the terms of the trust agreement.

Risk Averse

A description of an investor's or institution's preference to avoid risk, opting instead for the most stable and predictable outcomes.