Your utility company will need to buy 125,000 barrels of oil in 10 days? time, and it is worried about fuel costs. Suppose you go long 125 oil futures? contracts, each for 1,000 barrels of? oil, at the current futures price of $60.00 per barrel. Suppose futures prices change each day as follows

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 10 ?days? Have you been protected against a rise in oil? prices?

c. What is the largest cumulative loss you will experience over the 10?-day ?period? In what case might this be a? problem?

63 62 61 60 59 58 57 $59.50 $5775 $5750 $60.50 $59.50 $58.00 Day $62.50 $61.75 $60.75 $59.75 10