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You are expected to deliver 14,954 ounces of silver to your main customer six months from now. You are concerned that the price of
You are expected to deliver 14,954 ounces of silver to your main customer six months from now. You are concerned that the price of silver (which is $14 today) may go up, and thus, you decide to hedge by buying a futures contract on gold. The cost per gold ounce in the futures contract is $11. Six months from now, the price of both silver and gold are now $25. You close your positions. What is your overall gain/loss?
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In this scenario you have decided to hedge your position in silver by buying a futures contract on g...
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Data Analysis And Decision Making
Authors: Christian Albright, Wayne Winston, Christopher Zappe
4th Edition
538476125, 978-0538476126
