Which of the Following Statements Is True

question 41

Multiple Choice

Which of the following statements is true?

• A)The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called value risk.
• B)The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called basis risk.
• C)The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called gap risk.
• D)The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called fundamental risk.

---

Definitions:

2-Butanone

A simple ketone with the formula CH3C(O)CH2CH3, also known as methyl ethyl ketone (MEK), used as a solvent.

Transformation

The process of changing the structure, composition, or form of a molecule or substance through chemical reactions.

Methylbutan-1-ol

A primary alcohol derived from butane by replacing one hydrogen atom with a hydroxyl group at the first carbon.

2-Methylbutanal

A type of aldehyde with a five-carbon chain where the second carbon atom from the end is substituted with a methyl group.