answer 15

Use the following data for questions 14-16 A manufacturer needs to buy 100.000 ounces of silver in three months time. The current spot price is S = 23.50/oz. The futures price with a settlement date in three months is F = 23.75/oz. In three months time the following occurs - F = 24.00/oz and the spot price is $24.00/4.. X 14. How many contracts does the manufacturer need? a. 5 b. 4 c. 3 d. 2 e. 15. If the manufacturer needs to buy silver, what position should it take in the futures market to hedge? a. Short position b. Long position c. None because the price of silver is expected to increase only a small amount d. None because futures prices and spot prices converge at settlement e Both long and short