discuss how juanita could use futures contracts to hedge the fuel price
A1) Juanita could use futures to hedge the price risk for oil prices if she expects the price of oil to rise. If purchased, a futures contract would secure the price of oil at the current price for an unspecified time in the future. Juanita would have to pay a premium to purchase this contract, but she would be able to secure the lower fuel price at the later date.