In February, a company wanted to hedge the future purchase of crude oil some time in June
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Question:
In February, a company wanted to hedge the future purchase of crude oil some time in June or July by using August oil futures contracts. The August oil futures price was $72.00 per barrel. When the company decided to buy crude oil in July, the oil spot price was $79 and the August oil futures price was $74.
Calculate the net cost of purchasing the oil with hedging.
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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