Northern Refineries does not avoid risk by selling oil futures. If prices stay above $1.60 a gallon,

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“Northern Refineries does not avoid risk by selling oil futures. If prices stay above $1.60 a gallon, then it will actually have lost by selling oil futures at that price.” Is this a fair comment?

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Principles of Corporate Finance

ISBN: 978-0077404895

10th Edition

Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen

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Question Posted: Dec 31, 2012 10:49 AM

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Northern Refineries does not avoid risk by selling oil futures. If prices stay above $1.60 a gallon,

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Northern Refineries has fixed the price that it will re...View the full answer

Principles of Corporate Finance

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