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An oil refinery is worried about uncertainty regarding the price at which it can sell its refined oil output. To hedge this risk, the refinery
An oil refinery is worried about uncertainty regarding the price at which it can sell its refined oil output. To hedge this risk, the refinery should take a futures. By doing so, the refinery will have a positive payoff if oil prices were to position on oil long; increase long; decrease short; increase short; decrease
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