Which of the following is the best definition of economic exposure?

Multiple Choice

A legally binding agreement between two parties calling for the sale of an asset or product in the future at a price agreed upon today.

Reducing a firm's exposure to price or rate fluctuations.

An agreement that gives the owner the right, but not the obligation, to buy or sell a specific asset at a specific price for a set period of time.

Long$-$term financial risk arising from permanent changes in prices or other economic fundamentals.

A forward contract with the feature that gains and losses are realized each day rather than only on the settlement date.