What position should it take in the futures market, Finance Basics

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What position should it take in the futures market

Problem

A candy manufacturer wishes to control risk by hedging its exposure to the price of sugar in the futures market.

1. What position should it take in the futures market?

2. Assume it takes this position in the futures market when the futures price is 72 cents per ton. How much will the manufacturer gain or lose if the futures price moves to 75 cents per ton?

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Finance Basics: What position should it take in the futures market

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Finance Basics: What position should it take in the futures market

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