Problem $2$

In November $2017.$ A company anticipates that it will purchase $2,000$ ounces of gold in each of

February $2018,$ May $2018,$ July $2018,$ and November $2018.$ The company has decided to use the

futures contracts traded by the CME Group to hedge $80\%$ of its exposure. Assume the market

prices are summarized in Table $1.$ Please devise a hedging strategy for the company. What is the

net price paid to purchase gold in each of the four months in $2018?$

Table $1.$ Futures Prices in November $2017$

Table $2.$ Spot Prices