AAA Oil is an oil refining company. As an oil refiner, it purchases crude oil from drillers
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Question:
AAA Oil is an oil refining company. As an oil refiner, it purchases crude oil from drillers and refines the crude into multiple distillates on which it competes with a few other producers.
- What are the market risks that AAA Oil has exposure to? Identify the direction of the exposures. Why does it have these exposures? How are the exposures translatable to the Income Statement?
- Which of these exposures does it make sense for AAA to have a Tactical view? Why? Detail the circumstances that would drive AAA to initiate a tactical hedge.
Related Book For
Accounting for Decision Making and Control
ISBN: 978-1259564550
9th edition
Authors: Jerold Zimmerman
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