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Account of the cost of hedging

On April 1st the price of the gold is $1000 and the December futures price is $1015. On November 1st the price of the gold is $980 and the December futures price is 981$. A gold producer entered into a December futures contract on April 1st to hedge the sale of gold on November 1st. It closed out its position on November 1st. After taking account of the cost of hedging, what is the effective price received by the company for the gold?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Account of the cost of hedging

Reference No:- TGS0552678

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Account of the cost of hedging

Reference No:- TGS0552678

Recent Questions Asked Finance Basics

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