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ABC Mining Corp expects to have 1,000 tons of copper for sale in 1 month. a. If the CFO expects the price of copper to

ABC Mining Corp expects to have 1,000 tons of copper for sale in 1 month.

a. If the CFO expects the price of copper to increase next month, what option strategy could the company use now? (3 marks)

b. If the CFO expects the price of copper to decrease next month, what forward strategy could the company use now? (3 marks)

c. Compare and contrast using an option strategy with a futures strategy (4 marks)

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