Question
A local gasoline jobber hedges her gasoline purchases in the futures market. The contract chosen by this jobber to hedge is for the delivery of
A local gasoline jobber hedges her gasoline purchases in the futures market. The contract chosen by this jobber to hedge is for the delivery of 100,000 gallons of regular gasoline, on or up to seven days prior to December 1, 2019. This hedge was lifted on November 1, 2019. Please fill out the following table for this gasoline jobber.
|
| Spot (Cash) Market | Futures Market | Basis |
| Initial: | Buy @ 146 cents | Sell @ 148 cents |
|
| Lift: | Sell @ 160 cents | Buy @ 158 cents |
|
| Gains/ Losses |
|
|
|
Fill in the blanks above.
How much money was made or lost because of basis risk?
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Banking And Finance Managing The Moral Dimension
Authors: James Lynch
1st Edition
1855731762, 978-1855731769
