On March 1, an assets spot price (S0) is $50 and its June futures price (F0) is
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On March 1, an asset’s spot price (S0) is $50 and its June futures price (F0) is $49.50. On May 1, the spot price is $47 (St) and the June futures price is $47.50 (Ft). You entered into long futures contracts on March 1 to hedge your purchase of the asset on May 1. Suppose that you closed out the long futures position on May 1. Then, what is the effective price that you paid with the long hedging?
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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