1.Strengthening basis improves ______s position, and weakening basis improves _______s position.

a.Short hedger; Long hedger

b.Long hedger; Short hedger

c.Short hedger; Short hedger

d.Long hedger; Long hedger

e.Neutral hedger; Short hedger

2. All else equal, when the cost of carry is ________ than the convenience yield, the forward/futures prices __________ with contract maturity.

1. greater; do not change
2. greater; increase
3. smaller; increase
4. greater; decrease
5. smaller; do not change

1. 3._____ hedgers incur losses on futures position when the futures price is ______ over time; and ______ hedgers incur losses on futures position when the futures price is _______ over time.
2. 1. long; falling; short; falling
   2. long; increasing; short; increasing
   3. short, falling; long; increasing;
   4. long; falling; short; increasing
   5. long; steady; short; steady