December 2013 2a)

They are dealing in March contracts, which expire therefore at the end of March. 'Now' is 1 November, and so there are 5 months until the contracts expire. The futures deal will be ended on the date of the transaction which is 1 February. On that date there will be 2 months left until the contracts expire. We assume that the basis falls linearly over the life of the futures, and so when there are only 2 months left it will have fallen to 2/5 of what it currently is. (The free lecture on futures may be helpful to you)