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Q2. Now, instead of the contract to buy, firm XYZ from Q1 has a contract to sell 1million units of Natural Gas (NG) on FEB

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Q2. Now, instead of the contract to buy, firm XYZ from Q1 has a contract to sell 1million units of Natural Gas (NG) on FEB 15 2022. One NG futures on NYMEX is for 10,000 NG units. The firm uses h = 1 to hedge this contract. Today's spot market price of NG is $4.95/unit while the MAR futures price is $4.65/unit. Suppose that on FEB 15 the spot price turned out to be $4.50/unit and the MAR futures price on FEB 15 turned out to be $4.40/unit. *Show a complete time table to analyze the hedge. **Calculate the end result of the hedge. ***Indicate whether the hedge was successful or not. Q2. Now, instead of the contract to buy, firm XYZ from Q1 has a contract to sell 1million units of Natural Gas (NG) on FEB 15 2022. One NG futures on NYMEX is for 10,000 NG units. The firm uses h = 1 to hedge this contract. Today's spot market price of NG is $4.95/unit while the MAR futures price is $4.65/unit. Suppose that on FEB 15 the spot price turned out to be $4.50/unit and the MAR futures price on FEB 15 turned out to be $4.40/unit. *Show a complete time table to analyze the hedge. **Calculate the end result of the hedge. ***Indicate whether the hedge was successful or not

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