Definition of Basis risk

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TeachMeFinance.com - explain Basis risk



Basis risk

The term 'Basis risk ' as it applies to the area of agriculture can be defined as ' The possibility of unexpected variation in basis and a resulting loss of expected revenue when a futures contract is liquidated and the commodity sold on the cash market'.

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About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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