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Mogul oil company will sell 4 0 0 0 barrels of oil in 9 months. Suppose Mogul hedges the risk by selling futures on 4
Mogul oil company will sell barrels of oil in months. Suppose Mogul hedges the risk by selling futures on barrels of oil. The current oil futures price is $ dollars per barrel. If in months the spot price of oil is $ and the futures price is $ per barrel, what is Mogul's effective price of oil per barrel?
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