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An airline will purchase 10 million gallons of jet fuel in one month and hedges using heating oil futures From historical data F=0.37,S=0.29, and =0.942
An airline will purchase 10 million gallons of jet fuel in one month and hedges using heating oil futures From historical data F=0.37,S=0.29, and =0.942 The size of one heating oil contract is 42,000 gallons The spot price is 3.38 and the futures price is 3.346 (both dollars per gallon) Compute the Optimal number of contracts assuming no daily settlement. Compute the Optimal number of contracts after tailing
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