1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Akimi4 [234]
4 years ago
15

A decrease in the basis will __________ a long hedger and __________ a short hedger. Group of answer choices hurt; hurt hurt; be

nefit benefit; have no effect upon benefit; benefit benefit; hurt
Business
1 answer:
Lyrx [107]4 years ago
8 0

Answer:

hurt, benefit

Explanation:

The basis in a future contract is defined as the difference between the spot price of the asset in the cash market and the price of the same assets future contract.

A short hedge is an investment strategy that is used to protect hedge, against the risk of future decline in asset price or basically to hedge against potential losses by selling at a determined rate. This means that when one is in possession of a commodity and in order to protect against a decline, in the market, you sell (go short) the future contract , while long hedge is when you anticipate a need for the underlying commodity in the future. It means that to protect against an increase in the market price, you buy (go long) the future contract. Then when you are ready to buy the commodity, any increase in the market price is offset by your gain on the future contract.

The above means that where an asset and a contract are liquidated before due dates , there would be basis risk hence both the future and spot price need not move in lockstep before delivery date. This means that a decrease in the basis will benefit the short hedger and hurt the long hedger.

You might be interested in
the budgeted standard hours of a factory is 12000.the capacity utilization for april 2017 stood at 90% while the efficiencyratio
Vikki [24]

Answer:

ejtowp9iti2itnvidjeotngnei2nfjfjffjfjfjfjfjfkfkfjfkkrtjfkfjfkfkfkffofkfkfkf

Explanation:

wkkfjfjcjrjgjrjvjtjggjdjgiifgi

5 0
3 years ago
How did microsoft defend its case concerning the company's required installation of microsoft internet browsers with all install
Marrrta [24]
The browser could not be sold separately.
6 0
3 years ago
How long do you have to work at dollar general before you can transfer?
Marysya12 [62]
It really depend on the situation, but you could transfer on approximately 6 month.
All you need to do if you're already meeting the requirements is to tell your human resource manager your decision to transfer and why you want to make the transfer. Then, the HR manager will discuss it with his/her team whether you'll be authorized to do so.
7 0
4 years ago
When a financial institution provides a standardized financial product such as a mortgage, it is:________
Rufina [12.5K]

When a financial institution supplies a standardized financial product such as a mortgage, it is<u>: reducing transaction costs.</u>

<h3>What is an institution that manages and accommodates a nation's finances?</h3>

A central bank is a financial institution that is accountable for overseeing the monetary system and policy of a nation or group of nations, controlling its money supply, and setting interest rates.

<h3>Who uses financial institutions?</h3>

Almost everyone maintains a protection or checking account, uses debit or credit cards, or needs a loan. Online banking is an electronic way to view account training and pay bills via the Internet and an institution's website.

To learn more about financial institution ,refer

brainly.com/question/9297059

#SPJ4

6 0
1 year ago
The ideas of Adam Smith and Karl Marx 1. ___ used the metaphor of the "invisible hand" to: a. Describe how the individual pursui
melisa1 [442]

Answer: 1. A - Describe how the individual pursuit of self-interest works to promote the interest of the public as a whole

2. A- Both Adam Smith and Karl Marx believed that humans are motivated by self-interest

Explanation:

1. According to Adam Smith who is known as the father of modern economics stated in his thesis that individual's self-interest and freedom of production as well as consumption is in the best interest of the society as a whole.

Each Individual's free exchange creates signals about which goods and services are valuable. These signals will spontaneously direct competing consumers, producers, distributors, and intermediaries—each pursuing their individual plans— to fulfill the needs and desires of others.

Smith’s invisible hand became one of the primary justifications for an economic system of free market capitalism.

2. Pairing that best describes Adam Smith's view of human motivation in a market economy and Karl Marx's view of human motivation in a communist economy: Both Adam Smith and Karl Marx believed that humans are motivated by self-interest as they both believe that the economy is a capitalist economy that all its good and services are in the hands of private individuals.

7 0
3 years ago
Other questions:
  • Joe Beary wants to attend Riverside College. Eight years from today he will need $50,000. If Joe's bank pays 6% interest compoun
    14·1 answer
  • telmack Corporation, a manufacturing Corporation, has provided data concerning its operations for September. The beginning balan
    8·1 answer
  • The phi of 600 patients in Tennessee was breached. Whom should be notified
    11·1 answer
  • Derek has liquid assets of $4,450 and he saves $615 a month. His current liabilities are equal to $1,750 and monthly credit paym
    15·1 answer
  • Drag each label to the correct location on the table. Match the examples to the types of assets they represent.
    6·1 answer
  • Reporting an Income Statement, Reporting a Statement of Retained Earnings, Reporting a Balance Sheet and Recording Closing Journ
    6·1 answer
  • you or someone you know has experienced. What product did you buy, and what was your motive for buying it? (1-2 sentences. 1.0 p
    5·1 answer
  • Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ___
    9·1 answer
  • Typing resources allows managers to make better resource ordering decisions by:
    5·1 answer
  • Choose the best response for each of the following statements. a. When the Federal Reserve makes an open market purchase, the Fe
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!