Mogul oil company will sell 6000 barrels of oil in 11 months. risk by selling futures on 6000 barrels of oil. The current oil f per barrel. If in 11 months the spot price of oil is $22.75 and per barrel, what is Mogul's effective price of oil per barrel? 27.25 O24.25 O25.25 21.25

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Mogul oil company will sell 6000 barrels of oil in 11 months. Suppose Mogul hedges the
risk by selling futures on 6000 barrels of oil. The current oil futures price is $24.25 dollars
per barrel. If in 11 months the spot price of oil is $22.75 and the futures price is $25.75
per barrel, what is Mogul's effective price of oil per barrel?
27.25
O24.25
25.25
21.25
22.75
Transcribed Image Text:Mogul oil company will sell 6000 barrels of oil in 11 months. Suppose Mogul hedges the risk by selling futures on 6000 barrels of oil. The current oil futures price is $24.25 dollars per barrel. If in 11 months the spot price of oil is $22.75 and the futures price is $25.75 per barrel, what is Mogul's effective price of oil per barrel? 27.25 O24.25 25.25 21.25 22.75
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