Question
Read Question 12 in Chapter 16. For Part D, answer the question in the last bullet, based on part D. These questions in the last
Read Question 12 in Chapter 16. For Part D, answer the question in the last bullet, based on part D. These questions in the last bullet of part D are: A. If crude oil prices rise to $135, how much will they make or lose on the collar strategy above, on a per barrel basis (and state whether profit or loss)? B. If crude oil prices fall to $70, how much will they make or pay out on the option collar on a per barrel basis? C. If they buy the crude oil in the cash market, how much will be the net amount they pay for crude oil (assume it is a perfect hedge) on a per barrel basis?
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