On march 1 the price of oil is 50 and the july futures, Ask an Expert

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On March 1 the price of oil is $50 and the July futures price is $49. On June 1 the price of oil is $56 and the July futures price is $54. A company entered into a futures contract on March 1 to hedge the purchase of oil on June 1. It closed out its position on June 1. After taking account of the cost of hedging, what is the effective price paid by the company for the oil?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91598317

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