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Which of the following increases basis risk? A. Dissimilarity between the underlying asset of the futures contract and the hedger's exposure B. A large difference
Which of the following increases basis risk?
A. Dissimilarity between the underlying asset of the futures contract and the hedger's exposure | ||
B. A large difference between the futures prices when the hedge is put in place and when it is closed out | ||
C. A reduction in the time between the date when the futures contract is closed and its delivery month | ||
D. None of the above |
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