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Examveda

The difference between the cash price and the futures price on the same asset or commodity is known as the________________.

A. basis

B. spread

C. yield spread

D. premium

Answer: Option A

Solution(By Examveda Team)

The difference between the cash price and the futures price on the same asset or commodity is known as the basis. It is a crucial concept for portfolio managers and traders because this relationship between cash and futures prices affects the value of the contracts used in hedging.

This Question Belongs to Commerce >> Financial Management

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