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Thirty futures contracts are used to hedge an exposure to the price of gold. Each futures contract is on 50 ounces of gold. At the

Thirty futures contracts are used to hedge an exposure to the price of gold. Each futures contract is on 50 ounces of gold. At the time the hedge is closed out, the basis is $80 per ounce. What is the effect of the basis on the hedgers financial position if (a) the trader is hedging the purchase of gold and (b) the trader is hedging the sale of gold?

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