Which of the Following Correctly Expresses the Profit on a Hedge

question 14

Multiple Choice

Which of the following correctly expresses the profit on a hedge?

• A)the basis when the hedge is closed
• B)the change in the basis
• C)the spot profit minus the futures profit
• D)the futures profit minus the spot profit
• E)none of the above

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Definitions:

Algorithms

Step-by-step procedures or formulas for solving problems or completing tasks, used in mathematics and computer programming.

Functional Fixedness

A cognitive bias that limits a person's ability to use an object only in the way it is traditionally used, preventing them from solving a problem in a creative manner.

Mental Set

A cognitive bias that limits a person to using an approach that has previously worked, even when a different approach might be more beneficial.

Pencil Eraser

A tool made of rubber or similar substances used to remove graphite or ink marks from paper.