Company is obligated to sell more of the commodity

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You observe that a company has entered into futures contracts where the company is obligated to sell more of the commodity it produces than the volume they actually expect to produce. How might this be justified? What if instead you observed that a company had entered into futures contracts to sell less than the volume they expect to produce, say they have locked in a price for only 50% of anticipated production? How might this be justified?

Reference no: EM13879336

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