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A hedger uses twenty futures contracts to hedge an exposure to the price of copper. Each futures contract is on 25,000 pounds of copper. The

A hedger uses twenty futures contracts to hedge an exposure to the price of copper. Each futures contract is on 25,000 pounds of copper. The hedger decides to close out the position before the maturity of the contracts. At the time the hedge is closed out, the basis is $0.05 per ounce. If the trader hedging the purchase of gold, what is the gain or loss from closing out the position before maturity? What if the trader is hedging the sale of copper?

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