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The spot price of crude oil today is $45 per barrel. You enter into a long futures contracts for crude oil which has a futures
The spot price of crude oil today is $45 per barrel. You enter into a long futures contracts for crude oil which has a futures price of $43 per barrel. Suppose that when this contract is closed out the spot and futures prices will be $40 per barrel. What effective price will the company pay for crude oil?
a $40 per barrel
b $47 per barrel
c $45 per barrel
d $43 per barrel
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