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 winter wholesale cost of fuel rises above the June retail price.
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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