In January, the May futures price of copper is $3.06 per pound and the spot price is $3.00. A company needs 260,000 pounds copper late April and decides to trade in May futures to hedge the price risk of copper. On April 27, the company closes its position in the futures market when the spot price is $3.04 per pound, and the May futures price is $3.05. 

What is total amount paid for the copper after taking into account the gains or losses on the futures contracts?

Answer rating: 100% (QA)

Total Copper Needed in April 260000 pounds Size of one copper contract 25000 pounds Contracts Needed ... View the full answer