You are expected to deliver 14,954 ounces of silver to your main customer six months from...
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You are expected to deliver 14,954 ounces of silver to your main customer six months from now. You are concerned that the price of silver (which is $14 today) may go up, and thus, you decide to hedge by buying a futures contract on gold. The cost per gold ounce in the futures contract is $11. Six months from now, the price of both silver and gold are now $25. You close your positions. What is your overall gain/loss? You are expected to deliver 14,954 ounces of silver to your main customer six months from now. You are concerned that the price of silver (which is $14 today) may go up, and thus, you decide to hedge by buying a futures contract on gold. The cost per gold ounce in the futures contract is $11. Six months from now, the price of both silver and gold are now $25. You close your positions. What is your overall gain/loss?
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Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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