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please expain in a easy way Basis Risk: Basis = St - Ft = = Spot of price to hedge - Futures contract price Why
please expain in a easy way Basis Risk: Basis = St - Ft = = Spot of price to hedge - Futures contract price Why is there basis? Asset to be hedged may not be exactly the same as the asset underlying the futures contract - difference in quality difference in location calendar difference Basis risk = the uncertainty about the basis when the hedge is closed
please expain in a easy way
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