You hold 1 million barrels of oil at a current price of S0 = $25 per barrel. The current quoted futures price for
delivery of oil in about 1 years’ time is F = $26.25 per barrel. You want to hedge your spot oil position by using futures. The spot price of oil in 11½ months’ time is S1 = $20 per barrel and the futures price (for delivery in 2 weeks) is F1 = 20.042 ($ per barrel). What is the effective value of your hedged position in 11½ months’ time?
Recently Asked Questions
- Question #1 a) Based upon the required readings by Cornell, Curtis & Jorgensen (The Concept of Governance and Its Implications for First Nations) in your words
- What is Scientism and What are two main arguments against scientism?
- . Write an overview of the Federal Governments perspective of Self-Government. b) Write an overview of the First Nations perspective of Self-Government. c)