Your Oil Refinery Will Need to Buy 250,000 Barrels of Crude

question 62

Essay

Your oil refinery will need to buy 250,000 barrels of crude oil in one week and it is worried about crude oil prices.Suppose you buy 250 crude oil futures contracts,each for 1000 barrels of crude oil,at the current futures price of $68 per barrel.Suppose futures prices change each day over the next week as follows:
What is the daily and cumulative mark-to-market profit or loss (in thousands)that you will have on each of the next five days?

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Definitions:

Normality Requirement

The assumption that the data or residuals in certain statistical models follow a normal distribution.

Parametric Test

A type of statistical test that assumes the underlying data has a specific distribution, often based on parameters like mean and standard deviation.

Wilcoxon Signed Rank Test

The Wilcoxon Signed Rank Test is a non-parametric statistical test for comparing two matched or paired samples to assess whether their population mean ranks differ.

Test Statistic

A calculated value from data that is used to test a hypothesis in the context of statistical analysis, helping determine the probability of observing the given data under the null hypothesis.