'Basis Risk' Can Be Defined As

question 65

Multiple Choice

'Basis risk' can be defined as:

• A)the chance that a hedge instrument will not precisely manage a risk exposure
• B)the chance of a futures position resulting in a loss
• C)the chance of the physical market transaction resulting in a loss
• D)the risk a hedged investment earns more than expected
• E)the risk a hedged debt costs less than expected.

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Definitions:

Pyrimidines

One of the two classes of nitrogenous bases found in nucleic acids, including cytosine, thymine (in DNA), and uracil (in RNA).

Bacteriophages

Viruses that infect and replicate within bacteria.

Alfred Hershey

An American bacteriologist and geneticist, awarded the Nobel Prize in Physiology or Medicine in 1969 for his work on the genetics of viruses, including the famous Hershey-Chase experiment.

Martha Chase

An American geneticist who, along with Alfred Hershey, performed experiments confirming that DNA is the genetic material of life.