How can california plastics use futures contracts andor


California Plastics uses crude oil as one of its major raw material inputs. The current price of crude oil is $35 per barrel. The company is concerned that significant increases in the price of crude oil could jeopardize its profits.

Each $1 increase in the price of crude oil reduces the company's earnings per share by about $0.02.

How can California Plastics use futures contracts and/or options to protect itself against unfavorable price movements?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: How can california plastics use futures contracts andor
Reference No:- TGS01736493

Expected delivery within 24 Hours