Consider an electricity generator that buys brown coal. It seeks to hedge its brown coal purchase using coking coal futures contracts. On initiating the naive futures hedge, the coking coal spot and futures prices are 100UUD/ tonne and 120USD/ tonne respectively. The brown coal spot price is 40USD/tonne. On closing out the hedge 4 months later, the coking coal spot and futures prices are 108USD/ tonne and 110 USD/tonne respectively. The brown coal spot price is 45USD/ tonne. Taking into account the profit/loss on the hedge, the price paid is A. 120 USD/tonne B. 55USD/ tonne C. 35USD/tonne D. 118 USD/tonne E. None of these answers