Question: The higher the correlation coefficient is between a variable whose value is being hedged and the variable being used for the hedging instrument, the a.

The higher the correlation coefficient is between a variable whose value is being hedged and the variable being used for the hedging instrument, the

a. higher the basis risk

b. lower the basis risk

c. the higher the standard deviation of the hedged variable

d. the lower the standard deviation of the hedged variable

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