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2 Home Products Inc. (HPI) entered into a contract on June 30, Year 1 to buy 750,000 pounds of aluminum siding on September 30. Year 1, at a price of $18 25 a pound The company's treasurer simultaneously took a short position in a forward contact by agreeing to sell 750,000 pounds of aluminum at a price of $16.50 a pound on September 30, Year 1 Assume the following prices for aluminum siding and the aluminum forward contract June 30 Year 1 September 30 Year 1 Aluminum siding/b. $18.25 $17.95 Aluminum forward / lb $16 50 $16:32 Based on the above what is the eamings effect of the aluminum siding purchase commitment with the corresponding fan vake hedge at the September 30. Year 1 end? S90,000 loss 63'F Clear PM V1202 o search 2 Home Products Inc. (HPI) entered into a contract on June 30, Year 1 to buy 750,000 pounds of aluminum siding on September 30. Year 1, at a price of $18 25 a pound The company's treasurer simultaneously took a short position in a forward contact by agreeing to sell 750,000 pounds of aluminum at a price of $16.50 a pound on September 30, Year 1 Assume the following prices for aluminum siding and the aluminum forward contract June 30 Year 1 September 30 Year 1 Aluminum siding/b. $18.25 $17.95 Aluminum forward / lb $16 50 $16:32 Based on the above what is the eamings effect of the aluminum siding purchase commitment with the corresponding fan vake hedge at the September 30. Year 1 end? S90,000 loss 63'F Clear PM V1202 o search

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