Typed plzzz And Asap A small soybean grower expects to harvest one hundred thousand bushels in 6 months. The current cash price for thecrop is $16.25 per bushel. The soybean futures contract that matures in four months is currently trading at $16.25 perbushel. Each contract is for five thousand bushels.1. In 6 months the price of soybeans is $15.25 due to decreased overseas demand, the futures contract is $15.25 perbushel. How much is the gain or loss on the cash crop? On the futures contracts?

The soybean farmer grows soybeans, he needs to sell 100,000 bushels of soybean at the end of 6…

Answered: A small soybean grower expects to…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 3SBD

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Given the following information, what would you expect to be the minimum price at which a 3 month futures contract for 100 bushels of wheat would be trading? The spot price of wheat is $8 per bushel. Storage and insurance costs for wheat are $.50 per 100 bushels, per month, payable at the end of the storage period. • You can borrow money at 8% per year. a) $865.50 b) $814.50 c) $816.50 d) $817.5
You are the buyer for a cereal company and you must buy 80,000 bushels of corn next month. The futures contracts on corn are based on 5,000 bushels and are currently quoted at 415′0 cents per bushel for delivery next month. If you want to hedge your cost, you should _____ contracts at a cost of _____ per contract.
Suppose that you are a wheat farmer. Answer the following questions. It is August, and you intend to have 50,000 bushels of wheat harvested and ready to sell in November. The current spot market price of wheat is $2.45 per bushel, and the current December futures price of wheat is $2.70 per bushel. If each wheat futures contract is for 5,000 bushels, how many contracts will you buy or sell? You will sell 10 contracts. (Enter your response as an integer.) The total value of these futures contracts is $135000. (Enter your response as an integer.) It is now November, and you sell 50,000 bushels of wheat at the spot price of $2.55 per bushel. If the futures price is $2.80 and you settle your position in the futures market, what was your gain or loss on your futures market position? The loss on your futures market position was $5,000. (Enter your response as an integer.) on your spot market position was $ (Enter your response as an integer.) The
13. A farmer currently holds 7,000 bushels of corn. The local mill is offering a price of $4.13 per bushel. Currently, a three-month futures contract is trading at $4.22. The farmer is considering selling now or holding the corn in inventory and selling a futures contract now. The farmer can store and insure the corn at a cost of 18 cents per bushel per annum to be paid monthly in advance at the beginning of each month. Interest rates are 9%, continuously compounded. (a) Calculate total carrying cost per bushel of corn. (b) What is the theoretical price for a four-month futures contract? (c) What is the best strategy for the farmer? Explain why. (d) What is the basis today?
The spot price of corn is $5.85 per bushel. The effective interest rate for an investor is 0.5% per month. If storage costs of $0.04 per bushel per month are factored in, what is the likely price of a 4-month no-arbitrage forward contract? O$5.808 O $6.059 $5.968 $6.129
M1
Assume that the price of December 2021 corn futures is $4.65/bushel in February and $4.50 in October. If spot cash price in October is $4.55, what is the farmer's total revenue? Assume he entered into 20 contracts. Each corn contract is 5000 bushels.
A cattle farmer expects to have 120,000 lbs live cattle to sell in 3 months. Chicago Mercantile Exchange live-cattle futures with a three-month expiration exist for delivery of 40,000 lbs of cattle. How should this farmer hedge?
A farmer sells one corn futures contract at a price of $5.84 per bushel. The spot price of corn drops to $4.65 when the contract expires and the farmer delivers her corn. If the farmer harvested 24,000 bushels of corn and had futures contracts on 20,000 bushels of corn, what is the farmer's net proceeds when corn is sold?
A commercial bill with a face value of $50 000 has a current price of $49,291. This bill is trading at a yield of 7.5% which necessarily implies a time to maturity of how many days? The correct answer here is 70 days, can you show me the complete solution through excel on how to get it? Thank you so much in advance.
With a dry summer forecast, you expect that the soybean harvest will be smaller than normal and that soybean prices will rise. To speculate on this expectation, you buy 10 soybean futures contracts with a September maturity. The soybean futures price when you initiate the long position is $14.00 per bushel. By August the soybean futures price has risen to $16.00 per bushel. You execute an offset trade. What is your cumulative profit on the trades?
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