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On June 1 silver spot price per ounce is $20 and its October futures price is $19. On September 1 the spot price is $24
On June 1 silver spot price per ounce is $20 and its October futures price is $19. On September 1 the spot price is $24 and the April futures price is $24.50. A company entered into futures contracts on June 1 to hedge its sale of the silver on September 1. It closed out its position on September 1. What is the effective price (after taking account of hedging) received by the company?
A. | 19.5 | |
B. | 18.5 | |
C. | 20 | |
D. | 20.5 |
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