A company has 10,000 units of commodity A to sell on Oct. The firm decide to hedge
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A company has 10,000 units of commodity A to sell on Oct. The firm decide to hedge with a contract on commodity B (which is similar to commodity A). The optimal hedge ratio is 1.2. The futures price for a contract on commodity B is $90. The size of one Futures contract on commodity B is 1000 units. What trade is necessary?
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
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