Financial Risk Manager Part 1
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The May 2011 spot price (S1) of wheat is $7.00 per bushel and the December 2011 futures price (F1) is $9.00. Going forward three months to August, assume the spot price (S2) of wheat increases to $7.30 and the December 2011 futures price (F2) increased to $9.10. What happens to the basis between May and August?
The May 2011 spot price (S1) of wheat is $7.00 per bushel and the December 2011 futures price (F1) is $9.00. Going forward three months to August, assume the spot price (S2) of wheat increases to $7.30 and the December 2011 futures price (F2) increased to $9.10. What happens to the basis between May and August?
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Basis strengthens by +$0.10
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