Pima cotton grown in Arizona is known to be of higher quality than upland cotton grown in Texas. Because of this, the cotton basis is usually positive in Arizona (cash > futures), while it is typically negative in Texas (cash < futures). Assuming the time and spatial components of the basis are similar in Arizona and Texas, this difference is driven by the quality component of the basis. 

a: True 

b:False

Answer rating: 100% (QA)

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