If futures are over-priced (under-priced) relative to the spot, do you expect futures to be more or

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If futures are over-priced (under-priced) relative to the spot, do you expect futures to be more or less over-priced (underpriced) in the next period?

• Does it depend on the length of this period (one day or one week or one month)?

• What are the implications of this for mispricing/basis risk involved in hedging?

Related Book For answer-question

Management Accounting

ISBN: 978-0132570848

6th Canadian edition

Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu

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Posted Date: Jul 05, 2023 08:02 AM

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If futures are over-priced (under-priced) relative to the spot, do you expect futures to be more or

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If futures are overpriced underpriced relative to the spot we would generally expect them to become ... View the full answer

Management Accounting

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