Question
A hedger uses short futures contracts to hedge the sale of an asset. What happens to the hedger's position if the basis increases unexpectedly (the
A hedger uses short futures contracts to hedge the sale of an asset. What happens to the hedger's position if the basis increases unexpectedly (the basis is defined as: spot - futures)?
Select one:
a.The position stays the same
b.The position sometimes worsens and sometimes improves
c.The position improves
d.The position worsens
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
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