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Company 2 wishes to hedge its exposure to cotton with com futures over the next three months. The market price of cotton per fon and

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Company 2 wishes to hedge its exposure to cotton with com futures over the next three months. The market price of cotton per fon and future price of comporton for 8 months are given. The company has an exposure to the price of 1000 tons of the cotton Each futuros contract is on 42 tons of com. How many com contracts should be traded ? Answer is Founded) Month Corn future price perion Cotton price per ton 1 175 1770 2 176 1776 3 179 1783 4 185 1791 5 177 1788 6 189 1855 7 188 1902 8 184 1906

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