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Reference no: EM133111959

Using the estimate of 17.5 million gallons per month, how would you construct a NYMEX option hedge for the next 12 months? Using KCNB products, how would you construct a commodity-option hedge for 210 million gallons? What is the total cost of each? (Hint: use at-the-money calls and an at- the-money cap to construct the hedges.)

Reference no: EM133111959

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