Basis Risk and risk as delta, etc

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    koolliver
    Participant
    • Topics: 9
    • Replies: 18

    What is the source of basis risk and how it can be minimised ??
    How risks such as delta, vega, gamma. vega , rho, and theta can be manged ?
    what is mva ?


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    dazhong0703
    Participant
    • Topics: 44
    • Replies: 130

    http://opentuition.com/groups/ask-the-tutor-acca-p4-exams/forum/topic/reasons-for-existence-of-basis-risk/
    Just need to learn Delta hedge, the rest of “Greeks”, know concept will be enough.

    Market Value Added
    MVA is the value added to a business since it was formed, over and above the money invested in the company by shareholders and long term debt holders.
    Example
    BB Plc
    2003 Ve = $25m
    2004 Ve = $40m
    Rights issue in 2004 = $5m
    MVA = $40m – $25m – $5m = $10m


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    ray3026
    Participant
    • Topics: 5
    • Replies: 29

    you are required to calculate the delta hedge on how you do riskless portfolio…


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    abdullahxahoor
    Participant
    • Topics: 1
    • Replies: 8

    Hello.

    I know the concept of basis risk but i am having a difficulty in using it. When determining the futures closing price, whether the basis points adds up in the futures price or deducted from the futures price? Kindly help me.

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