Question: Purpose to make specify the commodity contract quotes to hedge Aluminum prices. 1) what would be the risk strategy if we had the opposite natural

Purpose to make specify the commodity contract quotes to hedge Aluminum prices.

1) what would be the risk strategy if we had the opposite natural position in Aluminum (i.e an inflow)?

2) what would be the natural position look like ? (unhedged)

3) what type of futures contract would hedge the risk? (payoff of future contract)

4)what would the combined payoff look like? combination equals (unhedge) + (payoff of the future contract)

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