Refer to Figure 24.6 to answer this question. Suppose today is June 20, 2012, and your firm is a jewellery manufacturer that needs 2,300 ounces of...

Refer to Figure 24.6 to answer this question. Suppose today is June 20, 2012, and your firm is a jewellery manufacturer that needs 2,300 ounces of gold in October for the fall production run.You would like to lock in your costs today, because you're concerned that gold prices might go up between now and October.

a.How could you use gold futures contracts to hedge your risk exposure? What price would you be effectively locking in?

b- Suppose gold prices are $1,587 per ounce in October. What is the profit or loss on your futures position?