Question

COP Company is a canola-oil producer. It purchases canola to make the oil. It’s

concerned with the price increase of canola. So the company decides to go long

in a forward contract with a price specified as $395 per ton for 20 tons to be

delivered in September 2014.

a) Develop a profit and loss table at future prices of $375, $385 and $405,

$415.

b) Explains the benefit of going with a long position for COP Company.

Answer 1

PLEASE DON’T FORGET TO GIVE A THUMBS UP ??!!!