Question
Which of the following is an example of locational basis risk? A. A producer of light, sweet crude oil in Canada that hedges its exposure
Which of the following is an example of locational 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 |
Which of the following is an example of calendar 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 |
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