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What is the natural position of a gold miner

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Question: In this question we consider a gold miner's hedging activities.

a. What is the natural position of a gold miner? Describe using payoff diagrams.

b. How would a gold miner hedge her position if gold prices are expected to drop steadily over the years? Show using pay off diagrams.

c. Would this hedge ever lead to losses?

Reference no: EM131696977

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