A hedger uses short futures contracts to hedge the sale of an asset. What happens to the hedger's position if the basis increases unexpectedly (the basis is defined as: spot - futures)?

Select one:

a.The position stays the same

 b.The position sometimes worsens and sometimes improves 

c.The position improves 

d.The position worsens

Answer rating: 100% (QA)

The detailed answer for the above question is provided below b The position sometimes worsens ... View the full answer