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A trader is hedging the purchase of an asset with a long futures position. The basis, defined as spot price minus futures price, increases unexpectedly.

A trader is hedging the purchase of an asset with a long futures position. The basis, defined as spot price minus futures price, increases unexpectedly. Which of the following is true?

A. The hedgers position worsens.

B. The hedgers position improves.

C. The hedgers position stays the same.

D. Whether the hedgers position worsens or improves is independent of the basis.

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