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Explain what action you would lake to protect from changes

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Question 1:

You are a crude oil dealer. You intend to buy 100,000 barrels of crude oil in March 2022. Each contract calls for delivery of LOGO barrels of oil. Current futures price of one barrel of crude oil is $20. You believe that there are only ?ve possible oil prices in December which are $50, $60, $20, $80 and $90.

i. Explain what action you would lake to protect from changes in oil prices in December. Provide reasons for your action.

ii. Calculate the total cost for each of the possible price in Deaembu.

Reference no: EM133060093

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