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Please provide an detailed explanation for the question, a. Why is it important to differentiate between consumption assets and investments in calculating forward/futures prices? b.

Please provide an detailed explanation for the question, 

a. Why is it important to differentiate between consumption assets and investments in calculating forward/futures prices?

b. Explain basis risk. What happens to the short and the long hedge when the basis strengthens?

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a Its crucial to differentiate between consumption assets and investments when calculating forwardfutures prices because the nature of these assets de... blur-text-image

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