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?

What is the mark-to-market profit or loss (in dollars) that you will have on each date?

Calculate the mark-to-market profit or loss below: (Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
1	$59.50	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
2	$57.50	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
3	$57.75	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
4	$58.00	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
5	$59.50	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
6	$60.50	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
7	$60.75	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
8	$59.75	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
9	$61.75	$		$

(Round price change to the nearest cent and profit or loss to the nearest dollar.)

Day	Price		Price Change		Profit/Loss
10	$62.50	$		$

b. What is your total profit or loss after 10 days? Have you been protected against a rise in oil prices?(Select from the drop-down menus.) Summing the daily profit/loss amounts, the total is a gain of___.

This gain offsets your increase in cost from the overallincrease in oil prices over the 10days, which increases your total cost of oil by ?

c. What is the largest cumulative loss you will experience over the 10-day period? In what case might this be a problem?(Select all the choices that apply.)

63 $62.50 62 $61.75 $60.50 $60.75 2 60$59.50 $59.50 $59.75 3 59 58 $5775 $58.00 $5750 57 L 4. Day