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The Yummy Chocolate Company (YCC) wishes to hedge its cocoa exposure for the next 90 days using futures. The cash price of cocoa today is

The Yummy Chocolate Company (YCC) wishes to hedge its cocoa exposure for the next 90 days using futures. The cash price of cocoa today is $2,546 per metric ton. The 90-day futures price for cocoa today is $2,625 per metric ton. At expiration of the futures contract in 90 days, the cash price of cocoa is $2,590 per metric ton. How will YCC hedge its exposure? Show YCCs final cocoa cost after a) cash purchase of cocoa; b) settling of futures position.

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