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Explain basis risk in terms of hedging in futures contracts. A company knows it needs to purchase 10,000 barrels of crude oil sometimes in October

Explain basis risk in terms of hedging in futures contracts. A company knows it needs to purchase 10,000 barrels of crude oil sometimes in October or November. Current price of December oil futures is $68 per bl. If the spot price in November 10 is $75 and December Futures price on Nov. 10 is $72, what is the basis risk?

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