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Author Question: Southwest Airlines relies on jet fuel to operate its planes. If it chooses to hedge against future ... (Read 92 times)

nmorano1

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on: Jun 30, 2018
Southwest Airlines relies on jet fuel to operate its planes. If it chooses to hedge against future changes in fuel prices, what positions (long or short) will it take in the spot and futures markets?
 
  What will be an ideal response?

Question 2

A decrease in expected inflation
 
  A) usually leads to falling nominal interest rates.
  B) results in increased nominal capital gains on physical assets.
  C) will shift the bond demand curve to the left.
  D) will shift the supply curve for loanable funds to the left.


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duy1981999

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Southwest will take a short position in the spot market and long position in the futures markets.

Answer to Question 2

A


nmorano1

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

scottmt

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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