Hedging: Hedging against an investment risk is termed for strategically implementing the instruments and tools in the market to minimize the risk and effects of any adverse price movements. It can be said that investors are benefitted through hedging as they hedge one investment by making another investment. To calculate : The transaction record of cost for entire 1 , 000 tons processed commodity A available for sale in terms of the desired out, the cost without the hedge and the cost with the hedge.

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Chapter 9.M, Problem M.1.2P

To determine

Hedging:

Hedging against an investment risk is termed for strategically implementing the instruments and tools in the market to minimize the risk and effects of any adverse price movements. It can be said that investors are benefitted through hedging as they hedge one investment by making another investment.

To calculate :

The transaction record of cost for entire 1,000 tons processed commodity A available for sale in terms of the desired out, the cost without the hedge and the cost with the hedge.

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