Your firm, which uses oil as an input to its production processes, hedges its exposure to changes

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Your firm, which uses oil as an input to its production processes, hedges its exposure to changes in the price of oil by buying call options on oil at today's price. If the price of oil goes down by the time the contract expires, what effect will that have on your company?
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Fundamentals of Corporate Finance

ISBN: 978-1118845899

3rd edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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