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The answers are: I am interested as to how to get these results. What procedure or formulas are used to obtain these profit values? Please

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The answers are:

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I am interested as to how to get these results. What procedure or formulas are used to obtain these profit values? Please just help give guidance on how to solve this problem, I know what the answers are but do not understand the work to get there. Thank you in advance!!

3.3 The following six companies participate, along with others, in the Southern Antarctica electrical energy market Red: A generating company owning a portfolio of plants with a maximum capacity of 1000 MW. Green: Another generating company with a portfolio of plants with a maximum capacity of 800 MW. Blue: A retailer of electrical energy. Yellow: Another retailer of electrical energy. Magenta: A trading company with no generating assets and no demand. Purple: Another trading company with no physical assets. The following information pertains to the operation of this market for Monday, February 29, 2016 between 1:00 and 2:00p.m. Load Forecasts Blue and Yellow forecast that their customers will consume, respectively, 1200 and 900 MW during that hour. Long-term contracts June 2015: Red signs a contract for the supply of 600 MW at 15$/MWh for all hours between January 1, 2015 and December 31, 2020. July 2015: Blue signs a contract for the purchase of 700 MW for all hours between February 1, 2016 and December 31, 2016. The price is set at 12 $/MWh for off-peak hours and at 15.50 $/MWh for peak hours. August 2015: Green signs a contract for the supply of 500 MW at 16 $/MWh for peak hours in February 2016. September 2015: Yellow signs a contract for the purchase of electric energy. The contract specifies a profile of daily and weekly volumes and a profile for daily and weekly prices. In particular, on weekdays between 1:00 and 2:00 p.m., the volume purchased is 550 MW at 16.25 $/MWh. Futures contracts: All contracts are for delivery on February 29, 2016 between 1:00 and 2:00p.m. Date Company Type Amount Price 14.50 14.75 10/9/15 20/9/15 30/9/15 10/10/15 20/10/15 30/10/15 Magenta Purple Yellow Magenta Red Green Buy Sell Buy Buy Sell Sell 50 100 200 100 200 250 15.00 15.00 1475 15.75 3 Markets for Electrical Energy (Continued) Date Company Type Amount Price 250 15.75 Buy Buy Sell 15.00 50 100 200 15.25 14.75 30/10/15 10/11/15 15/11/15 20/11/15 30/11/15 10/12/15 15/12/15 20/12/15 Buy Buy 300 15.00 16.00 Sell Sell 15.50 Blue Purple Magenta Yellow Blue Red Red Blue Purple Magenta Yellow Red Magenta Purple Yellow Sell 200 200 50 200 50 15.50 15/1/16 14.50 Sell Buy 14.25 20/1/16 10/2/16 Buy 50 14.50 20/2/16 Buy 16.00 200 100 25/2/16 Sell 17.00 28/2/16 250 14.00 Buy Sell 28/2/16 100 14.00 Option contracts In November 2015, Red bought a put option for 200 MWh at 14.75 $/MWh. The option fee was $50. In December 2015, Yellow bought a call option for 100 MWh at 15.50 $/MWh. The option fee was $25. Outcome The spot price on the Southern Antarctica electricity market was set at 15.75 $/MWh for February 29, 2016 between 1:00 and 2:00 p.m. Due to difficulties at one of its major plants, Red was only able to generate 800 MW. Its average cost of production was 14.00 $/MWh. Green generated 770 MW at an average cost of 14.25 $/MWh. Blue's demand turned out to be 1250 MW. Its average retail price was 16.50 $/MWh. Yellow demand turned out to be 850 MW. Its average retail price was 16.40 $/MWh. Assuming that all imbalances are settled at the spot market price, calculate the profit or loss made by each of these participants. Company Profit ($) Red Green Blue Yellow Magenta Purple 650 1280 1325 515 287.50 125 3.3 The following six companies participate, along with others, in the Southern Antarctica electrical energy market Red: A generating company owning a portfolio of plants with a maximum capacity of 1000 MW. Green: Another generating company with a portfolio of plants with a maximum capacity of 800 MW. Blue: A retailer of electrical energy. Yellow: Another retailer of electrical energy. Magenta: A trading company with no generating assets and no demand. Purple: Another trading company with no physical assets. The following information pertains to the operation of this market for Monday, February 29, 2016 between 1:00 and 2:00p.m. Load Forecasts Blue and Yellow forecast that their customers will consume, respectively, 1200 and 900 MW during that hour. Long-term contracts June 2015: Red signs a contract for the supply of 600 MW at 15$/MWh for all hours between January 1, 2015 and December 31, 2020. July 2015: Blue signs a contract for the purchase of 700 MW for all hours between February 1, 2016 and December 31, 2016. The price is set at 12 $/MWh for off-peak hours and at 15.50 $/MWh for peak hours. August 2015: Green signs a contract for the supply of 500 MW at 16 $/MWh for peak hours in February 2016. September 2015: Yellow signs a contract for the purchase of electric energy. The contract specifies a profile of daily and weekly volumes and a profile for daily and weekly prices. In particular, on weekdays between 1:00 and 2:00 p.m., the volume purchased is 550 MW at 16.25 $/MWh. Futures contracts: All contracts are for delivery on February 29, 2016 between 1:00 and 2:00p.m. Date Company Type Amount Price 14.50 14.75 10/9/15 20/9/15 30/9/15 10/10/15 20/10/15 30/10/15 Magenta Purple Yellow Magenta Red Green Buy Sell Buy Buy Sell Sell 50 100 200 100 200 250 15.00 15.00 1475 15.75 3 Markets for Electrical Energy (Continued) Date Company Type Amount Price 250 15.75 Buy Buy Sell 15.00 50 100 200 15.25 14.75 30/10/15 10/11/15 15/11/15 20/11/15 30/11/15 10/12/15 15/12/15 20/12/15 Buy Buy 300 15.00 16.00 Sell Sell 15.50 Blue Purple Magenta Yellow Blue Red Red Blue Purple Magenta Yellow Red Magenta Purple Yellow Sell 200 200 50 200 50 15.50 15/1/16 14.50 Sell Buy 14.25 20/1/16 10/2/16 Buy 50 14.50 20/2/16 Buy 16.00 200 100 25/2/16 Sell 17.00 28/2/16 250 14.00 Buy Sell 28/2/16 100 14.00 Option contracts In November 2015, Red bought a put option for 200 MWh at 14.75 $/MWh. The option fee was $50. In December 2015, Yellow bought a call option for 100 MWh at 15.50 $/MWh. The option fee was $25. Outcome The spot price on the Southern Antarctica electricity market was set at 15.75 $/MWh for February 29, 2016 between 1:00 and 2:00 p.m. Due to difficulties at one of its major plants, Red was only able to generate 800 MW. Its average cost of production was 14.00 $/MWh. Green generated 770 MW at an average cost of 14.25 $/MWh. Blue's demand turned out to be 1250 MW. Its average retail price was 16.50 $/MWh. Yellow demand turned out to be 850 MW. Its average retail price was 16.40 $/MWh. Assuming that all imbalances are settled at the spot market price, calculate the profit or loss made by each of these participants. Company Profit ($) Red Green Blue Yellow Magenta Purple 650 1280 1325 515 287.50 125

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