suppose that in September 2022, a company purchases 5 may 2023 crude oil futures to hedge a future purchase of crude oil. each contract is for the delivery of 1000 barrels of crude oil.

The future prices are $96 when it enters into the contract, $98 at the end of December 2022, $102 when it closes out its future position, and $104 on the futures contract's first delivery date.

Assume the company has a December 31- year end

consider the following;

I. taxed on a profit of 30,000 in 2023,

II. the company is taxed on a profit of 10000 in 2022

Which of the following is correct?

a. Statment I and II are incorrect

b. Statement I is incorrect, Statement II is correct

C. Statement I is correct, Statement II is incorrect

d. Statements I and II are correct