A commodity producer sells its production in the spot market. to hedge, it decides to collar 50,000

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A commodity producer sells its production in the spot market. to hedge, it decides to collar 50,000 units of the expected next year's sale, with a $60 floor and a $95 ceiling. the put premium is currently $5.50 and the call premium is $6.50. calculate the profit from the collar position, if the commodity price is $120 next year

Posted Date: May 09, 2024 02:47 AM

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A commodity producer sells its production in the spot market. to hedge, it decides to collar 50,000

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