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A jeweiry manufacturer issues a purchase order for 1,000 ounces of gold in 90 days. To hedge against increases in the price of gold, it

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A jeweiry manufacturer issues a purchase order for 1,000 ounces of gold in 90 days. To hedge against increases in the price of gold, it purchases 1,000 ounces of goid futures for dellvery in 90 days at $1,350 per ounce, also the current market price (spot). The cornpamy makes a $20, 0oo margin deposit. In 90 days, the market price (spot) of gold is $1,400; the company closes out its futures position and purchases the goid several doys later for $1,395 per ounce. A few months later, the compamy sells jewelry products containing the gold. How much cash will the company recelve upon closing the futures contract? a. 51,370,000 0.51.350,000 c. 550.000 d. 7.70.000

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