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On January 1st a commodity has the price of $1,000 and the October's futures price is $1,020. On September 1st the spot price is
On January 1st a commodity has the price of $1,000 and the October's futures price is $1,020. On September 1st the spot price is $980 and the October's futures price is $990. You short an October futures contract on January 1st to hedge. The position is closed out on September 1st. What is the effective price received by you for the commodity with hedging?
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Advanced Accounting
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
2nd edition
1934319309, 978-1934319307
