Q2) A jute packaging unit has planned production of 4950 kg of jute to be sold six months later. The spot price is 1940 per kg while six months futures are trading at 1880. The firm expects the price to fall to 1700 after 6 months with full season approaching. How can the unit mitigate the risk of reduced profit? If it decides to make use of the futures market what would be the effective price realized for its sale after 6 months when the spot and futures price were (a) Rs 1750 and Rs 1755 respectively (b) 2040 and 2050 respectively? Assume size of each futures contract is 200 kgs. (1+3+3) [7 marks] - CO3