Question: Basis risk refers to uncertainty about the future basis and is an important consideration when hedging. Explain the two main situations in which basis risk

Basis risk refers to uncertainty about the future basis and is an important consideration when hedging. Explain the two main situations in which basis risk arises

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Basis risk refers to uncertainty about the future basis and is an important consideration when hedging. Explain the two main situations in which basis risk arises.

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