(Answered) Question in this question we consider a gold miners hedging

Finance

Question: In this question we consider a gold miner's hedging activities.

a. What is the natural position of a gold miner? Describe using payoff diagrams.

b. How would a gold miner hedge her position if gold prices are expected to drop steadily over the years? Show using pay off diagrams.

c. Would this hedge ever lead to losses?

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