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A wool grower needs to sell 10,000 kg of wool in February and 5,000 kg...

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Accounting

A wool grower needs to sell 10,000 kg of wool in February and 5,000 kg in May. Futures contracts are for 2,500 kg and are available for all months through to June. An example of a strip hedge is:

Select one:

a. Four long January contracts and 2 short April contracts

b. Four long March contracts and 2 short June contracts

c. Four short March contracts and 2 short June contracts

d. Four short January contracts and 2 short April contracts

Note: Please give a short explanation for the reason you choose.

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