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Hi Sir,
Can you please suggest when do we add the basis risk to get the future expected price and when do we subtract it as i am still very confused for the same.
Thank you so much for your help as always.
If the current futures price is higher than the current spot rate, then it will always be higher. If the current futures price is lower than the current spot rate, then it will always be lower. This is what determines whether you add or subtract the basis risk.
Have you watched my free lectures on this?
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