The Good Joe Company has an agreement with several coffee manufactures to sell them 5 million...
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The Good Joe Company has an agreement with several coffee manufactures to sell them 5 million pounds of raw coffee beans over the coming year at a price of $10.00 per pound. One coffee futures contract is for the delivery of 37,500 pounds of coffee. How can the company hedge this transaction using futures? a) Should the company long or short the futures contract? Please input long or short in lower case. Your answer: b) How many futures contracts should the company trade? Please input only the number of contracts to trade; round the number to the nearest whole number. Your answer: The Good Joe Company has an agreement with several coffee manufactures to sell them 5 million pounds of raw coffee beans over the coming year at a price of $10.00 per pound. One coffee futures contract is for the delivery of 37,500 pounds of coffee. How can the company hedge this transaction using futures? a) Should the company long or short the futures contract? Please input long or short in lower case. Your answer: b) How many futures contracts should the company trade? Please input only the number of contracts to trade; round the number to the nearest whole number. Your answer:
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a short Explanation To hedge the transaction The Good Joe Company should short the futures contract ... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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