Question
A company has 10,000 units of commodity A to sell on Oct. The firm decide to hedge with a contract on commodity B (which is
A company has 10,000 units of commodity A to sell on Oct. The firm decide to hedge with a contract on commodity B (which is similar to commodity A). The optimal hedge ratio is 1.2. The futures price for a contract on commodity B is $90. The size of one Futures contract on commodity B is 1000 units. What trade is necessary?
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
11th edition
538480289, 978-0538480284
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