Jivanka Industries uses crude oil as one of its major raw material inputs. The company is concerned

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Jivanka Industries uses crude oil as one of its major raw material inputs. The company is concerned that significant increases in the price of crude oil could jeopardize its profits. How can the company use future contracts and/or options to protect itself against unfavorable price movements? Should it automatically hedge its entire exposure? Why or why not?
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Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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