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please explain and answer the question. Jumbo Airline, a hypothetical company, will purchase 2.5 million gallons of jet fuel in one month and hedges using
please explain and answer the question.
Jumbo Airline, a hypothetical company, will purchase 2.5 million gallons of jet fuel in one month and hedges using heating oil futures. Suppose that size of one heating of futures is unknowns. From historical data -0.0025. -0.0205, and 0.908. In addition, the spot price is 1.95 and the futures price is 1.98 (both dollars per gallon) (1) What will be the size of heating of futures if 4.51 heating of futures are required for optimal hedge with tailing? G) What will be the size of heating of futures if 4.51 heating of futures are required for optimal hedge without taling? For the toolbar, press ALT F10 (PC) or ALT+FN+F10 (Mac). BIVS Paragraph Arial 14px VE AIXO O Q *** -4 12@ EB B T00 Moving to another question will save this response W + WORDS POWERED BY TINY Question 27 of 28 e Close Window Step by Step Solution
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