Question
Nike will buy 1,000 units of a Rubber commodity in one year. It decides to hedge 80% of its exposure using futures contracts. The spot
Nike will buy 1,000 units of a Rubber commodity in one year. It decides to hedge 80% of its exposure using futures contracts. The spot price and the futures price are currently $100 and $90, respectively.(Show Work)
|
| Spot Price | Futures Price |
| Rubber Commodity, Currently | $100 | $90 |
| Rubber Commodity, in One Year | $112 | $110 |
If the spot price and the futures price in one year turn out to be $112 and $110, respectively, what is the average price paid for the commodity?
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Financial Statement Analysis
Authors: Charles H. Gibson
13th International Edition
1133189407, 9781133189404
