Today, an oil producer signs a contract to sell refinery RR 80,000 barrels of crude oil in

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Today, an oil producer signs a contract to sell refinery RR 80,000 barrels of crude oil in 6 months at the spot price on that day.

RR decides to hedge using NYMEX futures for delivery in 7 months trading today for $80/barrel and employing the hedge ratio h = .7. Every NYMEX crude oil futures covers 1,000 barrels.

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Advanced Accounting

ISBN: 978-1934319307

2nd edition

Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III

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Posted Date: Apr 06, 2024 03:22 AM

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Today, an oil producer signs a contract to sell refinery RR 80,000 barrels of crude oil in

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In this scenario RR a refinery has signed a contract to purchase 80000 barrels of crude oil from an ... View the full answer

Advanced Accounting

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