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An oil and gas XYZ company expects to produce 200,000 barrels of oil in time to deliver it on March 1, 2015. The management needs at least $30,000,000 for the oil to pay salaries, pay back loans, invest into new equipment, etc. It is known that stock markets trade in options on oil, each with an underlying asset of 100 barrels of oil of the same quality as the one produced by XYZ, and that these options are traded with various expiration dates and strike price. What would be an optimal move on the part of the management to achieve the aforementioned goal, assuming it can afford to trade in options?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91273877

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