The Basis on a Futures Contract Is Defined As

question 56

Multiple Choice

The basis on a futures contract is defined as:

• A) the cash price minus the forward price.
• B) the forward price minus the cash price.
• C) the futures price minus the cash price.
• D) the cash price minus the futures price.
• E) None of the above.

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Definitions:

Preferences

The subjective tastes or desires of individuals, affecting their choices among various goods, services, or outcomes.

Discovered

Found or identified after a search, exploration, or investigation, often implying that the object or information was previously unknown or hidden.

Rational Consumers

Individuals who aim to maximize their utility or satisfaction from consumption under the constraints of their budget.

Complete Preferences

A concept in economics where an individual's preferences over a set of goods or outcomes are fully defined, allowing for every pair of outcomes to be compared.