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You are working as a risk manager for a taxi company. You are worried that a sudden change in fuel price hurts your profit. You
You are working as a risk manager for a taxi company. You are worried that a sudden change in fuel price hurts your profit. You will need 1,000,000 liters of fuel next year. Which of the following strategy bests protects you against fuel price movements.
A take of a long position in a forward contract for 1,000,000 liters of fuel
B take a short position in a forward contract for 3,000,000 liters of fuel
C short put options on a total of 1,000,000 liters of fuel
D none of the above
Please explain which answer!
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