In April $2016$ a company realizes that it will have oil to sell in June $2017$ and decides

to hedge its risk with a hedge ratio of $1\mathrm{.}0.$ The current spot price is $$70.$ Although

futures contracts are traded with maturities stretching several years into the future,

we suppose that only the first six delivery months have sufficient liquidity to meet

the company's needs.

If the company decides to "stack and roll," what is the sales price $($per barrel$)$ of the

oil after accounting for the gains$/$losses on the hedge?

Date

April $2016$

Sept $2016$

Feb $2017$

June $2017$

Oct $2016$ futures

price

$68\mathrm{.}1$

$67\mathrm{.}4$

Mar $2017$ futures

price

July $2017$ futures

price