The Risk That Arises Because the Value of the Futures

question 4

Multiple Choice

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

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

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Definitions:

Expert Witness

An expert witness is a specialist in a particular field who is called upon to provide expert testimony or evidence in a court of law.

Eyewitness

A person who has seen something happen and can give a first-hand description of it.

Eyewitnesses

Individuals who have directly observed an event and can provide first-hand testimony or information about it.

Lay Witnesses

Individuals who provide testimony in a legal proceeding about what they have directly observed or experienced, without expert status.