Question
You need to buy 36,000 pounds of orange juice concentrate in three months. You go short position with the speculator at P54/lbs. If the price
You need to buy 36,000 pounds of orange juice concentrate in three months. You go short position with the speculator at P54/lbs. If the price of orange juice is P56 after three months.
- How much is your gain or loss?
- How much is the gain or loss of the speculator?
Price continuously rising so the speculator go short hedge with the hedger at P56. If the price of orange juice is P57 after three months.
- How much is the gain or loss of the speculator regarding this transaction?
- How much is the gain or loss of the hedger?
- How much is the gain or loss of the speculator for the whole transaction?
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Exam Prep For Financial And Managerial Accounting The Basis For Business Decisions By Williams Et Al 13th Ed
Authors: Mznlnx
13th Edition
1428871764, 978-1428871762
