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how calculations wherever required Q1. (a) A factory owner wants 10,000/- kg of raw material after two months. The current market price is Rs. 18
how calculations wherever required Q1. (a) A factory owner wants 10,000/- kg of raw material after two months. The current market price is Rs. 18 per kg. He wants to ensure that the raw material price does not go u beyond this level. A futures contract on the underlying maturing in three months is available and is going at Rs 18.50. After two months, the raw material price goes up to Rs. 26. What will be the payoff of the factory owner. The future price at the end of two months is Rs. 30/-.
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