Your utility company will need to buy 100,000 barrels of oil in 10 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:

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 aproblem?

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S62.50 56175 61 $6050 $60.75 60- $59.50 S59.50 $59.76 $57.75 0 123 4 5 678 10 Day