Phoenix Motors wants to lock in the cost of 10,000 ounces of platinum to be used in next quarters production of catalytic converters. It buys 3-month futures contracts for 10,000 ounces at a price of $1,590 per ounce.

a.	Suppose the spot price of platinum falls to $1,470 in 3 months time. Does Phoenix have a profit or loss on the futures contract?

Phoenix Motors has a PRofit OR LOSS (SPECIFY )s on the futures contract equal to $____ .

b-1.

Has it locked in the cost of purchasing the platinum it needs?

	Yes
	No

b-2.	What is the total lock-in cost?

Total cost

$

c.	If the spot price of platinum increases to $1,770 after 3 months, does Phoenix have a profit or loss on the futures contract?

Phoenix Motors has a (Click to select)profitloss on the futures contract equal to $ .

d.	What is the total lock-in cost?

Total cost

$