Question Title * 1. Lowering the standard deviation of the futures price changes causes the optimal hedge ratio to...? Increase Decrease No change Question Title * 2. What do we call the possibility that the price of a commodity guaranteed in a futures contract will change in relation to the spot price? Trimming the hedges The Optimal Hedge Ratio Counterparty risk Basis risk Question Title * 3. What is the purpose of discovering the optimal hedge ratio? To minimize the basis risk To eliminate the hedging contract risk To transfer risk to another party Done
