Question
The Save Factory purchased 8 futures contracts on cotton at a quoted price of $0.7145 as a hedge against its inventory needs. At the time
The Save Factory purchased 8 futures contracts on cotton at a quoted price of $0.7145 as a hedge against its inventory needs. At the time it actually needed the cotton, the spot price was $0.7162. Cotton futures are based on 50,000 pounds. How much did the Save Factory save by hedging cotton?
$4,130
$143
$3,380
$970
$680
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
