As in Example 22.5, suppose that oil will be selling in February for $71, $72, or $73

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As in Example 22.5, suppose that oil will be selling in February for $71, $72, or $73 per barrel. Consider a firm that plans to buy 100,000 barrels of oil in February. Show that if the firm buys 100 oil contracts today, its net expenditures in February will be hedged and equal to $7,200,000. P-636

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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