the danger that cost of a futures contract changes from the cost of the root money instrument as expiry methods.
When threat changes rates of interest causing a repricing. A mismatch in assets liability could be the outcome.
In asset responsibility administration, danger that changes in interest levels will reprice interest-incurring debts differently from repricing the interest-earning possessions, thus causing an asset-liability mismatch.
the essential difference between an index and a particular portfolio of losses (depending upon that index) as underlying basis for a hedge. As an example, insurer The's loss portfolio will never be exactly like the list used to determine the cost associated with the safety purchased to hedge losing portfolio. Basis threat outcomes from an imperfect hedge.