Explanation of Basis Risk

[AbhishekJha]

Can Basis Risk be explained with an example , on how the risk is calculated(basis risk that is) when the Price of the "Exposure" and "Hended Product" goes out of sync.

Could this be explained with a detailed and a simple example please.

 

[David Harper CFA FRM]

Hi @AbhishekJha please see my video T3-05: Basis risk is about an unexpected weakening or strengthening at https://forum.bionicturtle.com/thre...-unexpected-weakening-or-strengthening.22365/