Basis Risk

question 14

Multiple Choice

Basis risk:

• A)is the difference between the discounted futures price and the spot price.
• B)is also the degree to which the futures or forward price is unpredictable.
• C)is the sum of the futures price and the spot price.
• D)arises because investors are rational.

---

Definitions:

Cognitive Factors

Elements of thought and mental processes that influence perception, memory, problem-solving, and decision-making.

Perceived Provocation

The subjective interpretation or perception of an action or behavior as challenging, threatening, or insulting.

Positive Acknowledgement

The act of recognizing or affirming someone's efforts, achievements, or feelings in a supportive and validating manner.

Conduct Disorder

A mental health disorder diagnosed in childhood or adolescence characterized by a persistent pattern of disruptive and violent behaviors.