American Bankers Association Exam CTFA Topic 9 Question 88 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 88
Topic #: 9

[All CTFA Questions]

Which of the following involves an additional source of basis risk due to the difference between the asset being hedged and the asset underlying the futures?

ALong hedge

BShort hedge

CCross hedge

DStack hedge

Show Suggested Answer

Suggested Answer: C

by Dianne at Apr 08, 2025, 03:18 PM

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Kris

5 days ago

I agree, C is the correct answer. Cross-hedging introduces that extra layer of uncertainty.

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Cory

7 days ago

C) Cross hedge, definitely. The basis risk is the key factor here.

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German

10 days ago

I agree with Mitzie, cross hedge involves an additional source of basis risk.

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Mitzie

13 days ago

I think the answer is C) Cross hedge.

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