Commercial firm have derivative position qualify as hedge

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1. Why is it important for a commercial firm have a derivative position qualify as a hedge? Explain in full details.

2. Should a corporation hedge? Why might it increase firm value? Are there any reasons why a firm would not want to hedge? Explain in full details.

 

3. Do futures prices contain information about future spot prices? Explain in full details.

Reference no: EM131566306

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