21. Which of the following correctly expresses the profit on a hedge? (Points :

Question

21. Which of the following correctly expresses the profit on a hedge? (Points : 1)        the basis when the hedge is closed
       the change in the basis
       the spot profit minus the futures profit
       the futures profit minus the spot profit
       none of the above

Question 22. 22. What happens to the basis through the contract's life? (Points : 1)        it initially decreases, then increases
       it initially increases, then decreases
       it remains relatively steady
       it moves toward zero
       none of the above

Explanation / Answer

21. Which of the following correctly expresses the profit on a hedge? (Points :

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