Mogul oil refinery is planning to buy 8000 barrels of oil in 9 months. Suppose Mogul
hedges the risk by buying futures on 5600.0 barrels of oil. The current oil futures price is
$17.6 dollars per barrel. If in 9 months the spot price of oil is $16.5 and the futures price
is $16.5 per barrel, what is Mogul's effective cost per barrel?
Answer rating: 100% (QA)
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