A farmer would like to use futures contracts for wheat to hedge his future revenue. He expects
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Question:
A farmer would like to use futures contracts for wheat to hedge his future revenue. He expects to harvest and sell his wheat in September 2022, but the futures contract matures in October 2022. The risk that the farmer is exposed under such hedging strategy is called?
A) Option risk
B) Forward risk
C) Duration risk
D) Basis risk
E) Contract risk
F) Market risk
G) Margin risk
H) Systematic risk
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