1. On June 6, 2021, company A knows that it will sell 1,000 barrels of crude oil on September 17, 2021. A will use a hedge with one WTI NYMEX OCT futures. The OCT Futures traded on 6/6/ 2021 for $67/barrel.

a. What type of hedge will company A open?

b. On September 17, 2021 crude spot price is $70/barrel and the OCT Futures is trading for $71.50/barrel. Company A sells the 1,000 barrel in the spot market and closes its hedge. Calculate the price per barrel company A receives.

c. is this a successful or unsuccessful hedge? Why.

2. Firm B opened a long Gold hedge on APR 12, 2021 when the spot price is $1,600/oz and the futures price is $1,634/oz. Firm B closed the long hedge on July 17, 2021 when the basis was -$38/oz. Calculate the price per ounce (oz) paid by firm B.

3. Firm C opened a short Natural Gas (NG) hedge on May 2, 2020 when the NG spot market price was $7.5/unit and the futures market price for JUN 2021 was $8.0/unit. On May 14 2021 firm C sold the NG in the spot market for $5/unit and closed the hedge with the futures price for JUN = $5.5/unit. Calculate the price/unit received by firm C.