Which statement best describes who benefits from basis strengthening over a hedge with a futures contract?
A. Buyers gain, sellers lose
B. Buyers lose, sellers gain
C. Both gain
D. Neither gains or loses since they have offset their basis risk by hedging
Ans: B. Buyers lose, sellers gain
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Which of the following statements is TRUE?
A) investment = disposable income + consumption B) saving = personal income + consumption C) saving = personal income - consumption D) saving = disposable income - consumption
Accelerator theory refers to the theory of
A) consumption that emphasizes that current consumer spending depends positively on the expected future growth of GDP. B) investment that emphasizes that current investment spending depends positively on the expected future growth of government spending. C) consumption that emphasizes that increases in consumption spending will result, through the multiplier effect, in greater increases in GDP. D) investment that emphasizes that current investment spending depends positively on the expected future growth of GDP.