____ risk is the risk that the position being hedged by a futures contract is not affected in the same manner as the instrument underlying the futures contract.

Question

Quizplus · Accepted Answer

Basis risk is the risk that the position being hedged by a futures contract is not affected in the same manner as the instrument underlying the futures contract. This can occur because the underlying asset of the futures contract is not perfectly correlated with the asset, liability, or transaction being hedged.

____ Risk Is the Risk That the Position Being Hedged