Your utility company will need to buy 100,000 barrels of oil in ten days time, and it is worried about fuel costs. Suppose you go long 100 oil futures contracts, each for 1000 barrels of oil, at the current futures price of $60 per barrel. Suppose futures prices change each day as follows:

Problem 30-6 Your utility company will need to buy 100,000 barrels of oil in ten days time, and it is worri you go long 100 oil futures contracts, each for 1000 barrels of oil, at the current futures pric futures prices change each day as follows: 63 62 $61.75 Future Price ($/bbl) 61 $60.75 $60.50 60 $60.00 $59.50 $59.75 $59.50 59 58 $58.00 $57.75 $57.50 57 0 1 2 3 4 5 6 7 8 9 Day a. What is the mark-to-market profit or loss (in dollars) that you will have on each date? b. What is your total profit or loss after ten days? Have you been protected against a rise c. What is the largest cumulative loss you will experience over the ten-day period? In w problem? Position (long contracts) Contract (barrels) Current price 100 1,000 $60.00 a. What is the mark-to-market profit or loss (in dollars) that you will have on each date? Day 0 1 2 3 Price ($) 60.00 59.50 57.50 57.75 Gain/Loss ($) 4 5 6 7 8 9 10 58.00 59.50 60.50 60.75 59.75 61.75 62.50 b. What is your total profit or loss after ten days? Have you been protected against a rise Total Protected? c. What is the largest cumulative loss you will experience over the ten-day period? In w problem? Day 0 1 2 3 4 5 6 7 8 9 10 Gain/Loss ($) Cumulative ($) Largest cumulative loss This loss would be a problem if you had to liquidate that day.\" Requirements 1. In cell F31, by using cell references, calculate the profit or loss for day 1. Hint: Use absolute cell reference on cells E22 and E23 in order to get cell F31 ready to be c Copy and paste cell F31 onto cells F32:F40. (2 points.) 2. In cell E44, calculate the total profit or loss by using the function SUM. (1 point.) To see whether you have been protected against a rise in oil prices, you need to assess wheth 3. by using the function IF. In cell E45, input the function IF to compare whether the total profit (or loss) is greater than greater than zero, otherwise show NO. (1 point.) 4. To calculate the largest daily cumulative loss, you need to calculate the daily cumulative gai In cell F52, calculate the cumulative gain or loss for day 1 by making a cell reference to the E52. (1 point.) In cell F53, calculate the cumulative gain or loss for day 2 by adding the profit or loss for da 5. loss for day 1. Copy and paste cell F53 onto cells F54:F61. (2 points.) 6. To find the largest daily cumulative loss, in cell E63, use the function MIN. (1 point.) en days time, and it is worried about fuel costs. Suppose il, at the current futures price of $60 per barrel. Suppose $62.50 $61.75 $60.75 $60.50 $59.75 6 7 8 9 10 you will have on each date? been protected against a rise in oil prices? ver the ten-day period? In what case might this be a you will have on each date? been protected against a rise in oil prices? ver the ten-day period? In what case might this be a for day 1. to get cell F31 ready to be copied onto cell F32 to F40. n SUM. (1 point.) es, you need to assess whether you experienced a total profit or loss profit (or loss) is greater than 0, and show YES if total profit is late the daily cumulative gain or loss. aking a cell reference to the profit or loss for day 1, cell dding the profit or loss for day 2, and the cumulative gain or points.) nction MIN. (1 point.)