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CFO of Tiffany & Co. is concerned that the price of silver might increase substantially, so he decided to enter into a contract which would
CFO of Tiffany & Co. is concerned that the price of silver might increase substantially, so he decided to enter into a contract which would enable him to buy steel at a price agreed upon today with delivery and payment occurring in 6 months. He estimates that in 6-month time inventory needs would approximately be 12,000 ounces of silver Since each contract is for standard quantity of 5,000 ounces, he decided to buy 3 contracts This kind of contract is considered to be: futures forward option swap
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