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Q 1 0 . Suppose you are a distributor of flaxseed and you observe that the spot price is tf 9 . 9 0 per
Q Suppose you are a distributor of flaxseed and you observe that the spot price is tf per metric ton, and the futures price for delivery a month from now is What should you do if your cost of carry is tf per metric ton per month? a Choose to carry the flaxseed in storage for another month and hedge by taking a futures position. b Deliver the flaxseed immediately. c Immediately sell the flaxseed in the market for tf per ton. d Buy more flaxseed for tf per metric ton and not consider hedging.
Q Suppose you are a distributor of flaxseed and you observe that the spot price is tf per metric ton, and the futures price for delivery a month from now is What should you do if your cost of carry is tf per metric ton per month?
a Choose to carry the flaxseed in storage for another month and hedge by taking a futures position.
b Deliver the flaxseed immediately.
c Immediately sell the flaxseed in the market for tf per ton.
d Buy more flaxseed for tf per metric ton and not consider hedging.
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