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Basic Question 1 of 5

In the commodity swap market, a dealer may hedge its price risk exposure by ______.

I. hedging in the futures market
II. entering a swap with another party
III. purchasing a commodity contract

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Craig Baugh

Learning Outcome Statements

explain the notion that to affect market values, economic factors must affect one or more of the following: (1) default-free interest rates across maturities, (2) the timing and/or magnitude of expected cash flows, and (3) risk premiums;

explain the role of expectations and changes in expectations in market valuation;

CFA® 2025 Level II Curriculum, Volume 6, Module 33.