A refinery expects to have 2,500,000 barrels of crude oil to buy in 3 months. The...
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A refinery expects to have 2,500,000 barrels of crude oil to buy in 3 months. The crude oil futures traded by the New York Mercantile exchange is for the delivery of 1000 barrels per contract. How can the refinery use futures contracts for hedging? What are some pros and cons of hedging for the refinery company? A refinery expects to have 2,500,000 barrels of crude oil to buy in 3 months. The crude oil futures traded by the New York Mercantile exchange is for the delivery of 1000 barrels per contract. How can the refinery use futures contracts for hedging? What are some pros and cons of hedging for the refinery company?
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To hedge against the risk of fluctuating crude oil prices the refinery can use futures contracts Her... View the full answer
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