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(a) An oil producer enters into a one-year short forward contract to sell 6000 barrels of oil for $74 per barrel when the spot
(a) An oil producer enters into a one-year short forward contract to sell 6000 barrels of oil for $74 per barrel when the spot (market) price is $72 per barrel. The spot (market) price in one year proves to be $70 per barrel. What is the producer's gain or loss? Show a dollar amount and indicate whether it is a gain or a loss.
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
