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A company plans to buy 1 million pounds of copper in April. To hedge, the company takes a long position of the May copper futures
A company plans to buy 1 million pounds of copper in April. To hedge, the company takes a long position of the May copper futures contract for 1 million pounds. The current May futures price is $2.06/pound. When the company buys copper and closes out the futures position in April, the spot price is $2.05 and the futures price is $2.04. What is the companys net purchase price of copper per pound?
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