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The basis is defined as spot minus futures price. A trader is hedging the purchase of an asset with a long futures position. The basis
The basis is defined as spot minus futures price. A trader is hedging the purchase of an asset with a long futures position. The basis decrease unexpectedly. Which of the following is true?
a. The hedgers position stays the same
b. The hedgers position improves
c. The hedgers position sometimes improves and sometimes worsens
d. The hedgers position worsens
e. None of this choices
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