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  • FNCE30007 WK02 ReadingNotes PDF

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    Jia Shi
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    Strengthening of the basis occurs with an increase in basis, while weakening of the basis is a decrease in basis. Futures prices can fluctuate greatly during the delivery month, so contracts with later delivery months are usually chosen. When futures prices fall below spot prices, total compensation for a price decline through the futures market cannot be expected.

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    Strengthening of the basis occurs with an increase in basis, while weakening of the basis is a decrease in basis. Futures prices can fluctuate greatly during the delivery month, so contracts with later delivery months are usually chosen. When futures prices fall below spot prices, total compensation for a price decline through the futures market cannot be expected.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views1 page

    FNCE30007 WK02 ReadingNotes PDF

    Uploaded by

    Jia Shi
    Strengthening of the basis occurs with an increase in basis, while weakening of the basis is a decrease in basis. Futures prices can fluctuate greatly during the delivery month, so contracts with later delivery months are usually chosen. When futures prices fall below spot prices, total compensation for a price decline through the futures market cannot be expected.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Chapter 3

    Strengthening of the basis: Increase in basis

    Weakening of the basis: Decrease in basis

    Futures prices can be quite erratic during delivery month, so contract with a later delivery month is

    usually chosen

    Cannot expect total compensation for a price decline when futures prices are below spot prices

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