Table Window Help 20D Tue 12:53 AM Autorem n o . Futures hedge 101 -Saved to my Mac Layout References Malings Review View Call to 11 AA AA EE BIUXX AAEEEEE ABOCCO Futures Hedging Problem 1 1. It's December. A crude oil market participant has an existing agreement to buy crude oilata foxed price during the coming year. It will sell the purchased crude at market prices each quarter. The current futures prices for WTI Crude are: Futures curve Date Price December March June September 66 These prices are in contango. Explain. What is the average price the firm expects to pay for WTI Crude in the futures market? The agreement to purchase crude is at the average price To hedge the cost of crude oil, should the firm golong or short crude futures? In February, the price of forward crude rises by $5/barrel. Show the quarterly cost of crude paid by the firm, plus quarterly futures gains and losses, for the coming year Papa 136 - 4 tagliah united States) 2 A E E B / D O