What is the average price paid for the commodity

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Reference no: EM131070833

A company will buy 1000 units of a certain commodity in one year. It decides to hedge 80% of its exposure using futures contracts. Spot price and futures price are currently $100 and $90. The one year futures price of the commodity is $90. If the spot price and the futures price in one year turn out to be $112 and $110 respectively, what is the average price paid for the commodity?

Reference no: EM131070833

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