Question
In: Economics
A corporation signed a futures contract buying 200,000 gallons of gasoline at $2.4 per gallon to...
A corporation signed a futures contract buying 200,000 gallons of gasoline at $2.4 per gallon to be delivered 6 months from today. Six months later, the actual gasoline price was $1.8 per gallon.
Corporation A would ____ by ____ due to signing of the futures contract.
Select one:
A. gain, $0.6
B. lose, 0.6%
C. gain, $120,000
D. lose, $120,000
E. none
Solutions
Expert Solution
Because the prices have fallen, the company is at a situation of loss.
The loss is equal to ($2.4-$1.8)*200000 =$120000.
Hence the correct option is
D. Lose, $120,000.
Rahul Sunny answered 2 years agoRelated Solutions
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