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An aluminium buckets producer expects to buy 6 0 0 tons of aluminium in 3 months time. To hedge the cost of the input the
An aluminium buckets producer expects to buy tons of aluminium in months time. To hedge the cost of the input the producer goes long futures contracts for tons of aluminium at the cost of $ per ton. In months time the price of aluminium has fallen to $ per ton. What will be the total cost of the tons of aluminium including any money received or spent to settle the futures contracts Assume all transaction costs are zero.
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