- 3 1 Suppose That In September 2015 A Company Takes A Long Position In A Contract On May 2016 Crude Oil Futures It Clo 1 (84.33 KiB) Viewed 48 times
3. 1) Suppose that in September 2015 a company takes a long position in a contract on May 2016 crude oil futures. It clo
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3. 1) Suppose that in September 2015 a company takes a long position in a contract on May 2016 crude oil futures. It clo
3. 1) Suppose that in September 2015 a company takes a long position in a contract on May 2016 crude oil futures. It closes out its position in March 2016. The futures price (per barrel) is $88.30 when it enters into the contract, $90.50 when it closes out its position, and $89.10 at the end of December 2015. One contract is for the delivery of 1,000 barrels. (a) What is the company's total profit? [10% marks] (b) When is it realized? [10% marks] (c) How is it taxed if it is (i) a hedger and (ii) a speculator? Assume that the company has a December 31 year-end.
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