Explain the long hedge or a short hedge

Reference no: EM131458013

Question: There is no futures contract on aviation fuel. Combo Air Inc. has to buy 3 million gallons of aviation fuel in three months. Suppose you are in charge of Combo Air's hedging activities. You gather the following data:

a. Which energy futures contract will you choose for hedging jet fuel purchase?

b. Is this a long hedge or a short hedge?

Reference no: EM131458013

Questions Cloud

Creating key components of a project management plan : PROJ 6002: Project Planning and Budgeting Assessment - Scope and Time Management Plan. In this subject, creating key components of a Project Management plan

Analyze the matlab program and write a report about it : Analyze the Matlab program and write a report about it ( if some inputs change , what happens to the outputs? ) . it is about the power spectral energy.

What other investment has this profit diagram : Using options with strike price K3 = 22.50, draw the profit diagram for a long call, a short stock, and a short put position for options with the same strike.

Describe the dilemmas portrayed in the media presentation : Post a brief description of the dilemmas portrayed in the media presentation, including the individuals involved in the case.

Explain the long hedge or a short hedge : here is no futures contract on aviation fuel. Combo Air Inc. has to buy 3 million gallons of aviation fuel in three months. Suppose you are in charge of Combo.

How does the sewage arrive at the wvsa : How does the sewage arrive at the WVSA? What are the waste products from the treatment process and how is the waste disposed of?

What strategy should the beef producer follow explain : The variance of monthly changes in the spot price of live cattle is (in cents per pound) 1.5. The variance of monthly changes in the futures price.

Calculate the actual return : Calculate the actual return (also called percentage return) on your investment in (i) ABC, (ii) XYZ and (iii) the portfolio over the last year

Sales volumes and the consistency of sales : Your supervisor has asked you to prepare a brief report comparing the sales volumes and the consistency of sales of these four salespersons.

User Account

All Pages