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XYZ company sells gold necklaces. You sell the necklaces for the price of gold plus a $400 profit. There is a four-month time lag between
XYZ company sells gold necklaces. You sell the necklaces for the price of gold plus a $400 profit. There is a four-month time lag between the time you buy the gold and the time you can sell the necklaces. What is a viable strategy for your company:
-Go long and go short future contracts when you buy the gold
-Do nothing as futures cannot be used to hedge
- Go long a gold futures contract when you buy gold
-Short a gold futures contract when you buy gold
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