All of the following are reasons why a firm hedges its risk exposure except:

	A.	Prevent financial distress by locking in prices
	B.	Increase the value of a firm
	C.	Generate extra income
	D.	Prevent under-investment

the size of the natural gas contract traded on the NYMEX is: A. 10,000 BTU B. 10,000 mmBTU C. 10,000 kwh D. 10,000 mmKWH

The largest category of energy derivatives traded is:

	A.	petroleum and its derivatives
	B.	natural gas
	C.	natural gas liquids
	D.	electricity

Which of the following is an example of quality basis risk?

	A.	A producer of light, sweet crude oil in Canada that hedges its exposure with NYMEX WTI futures
	B.	An airline that hedges its jet fuel input with heating oil futures
	C.	A refiner that hedges its gasoline output in August with September futures
	D.	A natural gas trader that buys the summer-winter natural gas spread