Suppose that in September 2007 a company takes a long position in a contract on May 2008 crude oil futures. It closes out its position in March 2008. The futures price

(per barrel) is $68.30 when it enters into the contract, $70.50 when it closes out the position, and S69.10 at the end of December 2007. One contract is for the delivery of 1,000 barrels. What is the company's profit? When is it realized? How is it taxed if it is

(a) a hedger and (I)) a speculator? Assume that the company has a December 31 year end.