Swenson Oil & Gas allows its customers to prepurchase heating oil in June for the coming winter.If Swenson does not hedge its positions in the futures market:
A) it could make unexpected profits if fuel prices decline.
B) it could suffer large losses if the wholesale cost of fuel rises above the price it sold the fuel for in June.
C) it will make normal profits if winter prices do not change very much from the June spot price.
D) all of the above.
Correct Answer:
Verified
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