No chatgpt. Crude oil contracts are $1,000$ barrels, are quoted in dollars per barrel, and the initial margin is $9,000$ per

contract. Please answer D and E and explain how to get the effective price. Answers are given.

$20.$ TPHB$,$ Inc. expects to sell $1\mathrm{.}1$ million barrels of crude oil in November and will hedge its position

with the December futures contract. Today$$s crude oil spot price is $53\mathrm{.}50$ and the December crude

oil futures price is $54\mathrm{.}27($crude oil futures prices are quoted in dollars per barrel$).$

a$.$ What is the basis today? $-0\mathrm{.}77$

b$.$ If December crude oil futures price is $54\mathrm{.}60$ in November when TPHB closes out its hedge,

what profit$/$loss will TPHB make on its futures position? $$363,000$ loss

c$.$ If the December crude oil futures price is $54\mathrm{.}10$ in November when TPHB closes out its

hedge, what profit$/$loss will TPHB make on its futures position? $$187,000$ profit

d$.$ If the crude oil spot price in November is $54\mathrm{.}05$ when TPHB sells its crude oil and closes its

futures position, what is the effective price per barrel it would receive if the December

futures price is $54\mathrm{.}60?$ If it is $54\mathrm{.}10?$ $$53\mathrm{.}72$; $$54\mathrm{.}22$

e$.$ What is the basis in November when TPHB sells its crude oil if the futures price is $54\mathrm{.}60?$

If it is $54\mathrm{.}10?-0\mathrm{.}55$; $-0\mathrm{.}05$