CFA Level I sample question

CFA Level I Derivative Benefits, Risks, and Issuer and Investor Uses question

Derivatives / Derivative Benefits, Risks, and Issuer and Investor Uses

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Derivative Benefits, Risks, and Issuer and Investor Uses sample question

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Derivatives

Derivative Benefits, Risks, and Issuer and Investor Uses

Because jet fuel futures with a suitable expiration are unavailable, an airline hedges an anticipated jet fuel purchase by buying heating oil futures. When the hedge is closed, jet fuel prices have risen 9% while the heating oil futures price has risen only 5%, leaving the airline with a materially larger net fuel cost than planned. The shortfall is best attributed to:

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