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Gulf Exploration Inc plans to sell 2,000 barrels of crude oil in July. The spot price of crude is currently $75.65 /barrel.Crude Oil futures are

Gulf Exploration Inc plans to sell 2,000 barrels of crude oil in July. The spot price of crude is currently $75.65 /barrel.Crude Oil futures are defined as 500b, $/b. August crude is quoted at 74.87.

To fully hedge its position Gulf Exploration should (Buy? / Sell?)

How many contracts? ___?___

The basis is $___?___

A textbook Hedge will lock in an effective price of $___?___

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