Today is in February. The spot price for gold is $1260.74 and the June futures price...
Today is in February. The spot price for gold is $1260.74 and the June futures price is $1275.08. (All prices are per Troy ounce.) A jewelry manufacturer hedges its May purchase of gold with twenty (20) June gold futures contracts. In May, the company buys gold in the spot market for $1395.67 and closes out its futures position at a futures price of $1365.9. What is the basis in May for the hedge?
Homework Answers
Basis= cash (spot) price of the commodity-futures price= 1395.67 - 1365.9 = $ 29.77
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Today is in February. The spot price for gold is $1260.74 and
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