a wheat trader who believes that the price of wheat will increase in the short-term. He takes a long position (buys) ten wheat contracts to take advantages of future increase in prices. Details of the wheat contract include: Contract size: 5,000 bushels Current (spot) price: $0.70 per bushel Futures price: $0.75 per bushel Calculate his profit/loss from this transaction if the price of wheat is $0.82 per bushel at expiration. $3,500 $4,000 $3,000 $2,500
a wheat trader who believes that the price of wheat will increase in the short-term. He takes a long position (buys) ten wheat contracts to take advantages of future increase in prices. Details of the wheat contract include: Contract size: 5,000 bushels Current (spot) price: $0.70 per bushel Futures price: $0.75 per bushel Calculate his profit/loss from this transaction if the price of wheat is $0.82 per bushel at expiration. $3,500 $4,000 $3,000 $2,500
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Marcus is a wheat trader who believes that the price of wheat will increase in the short-term. He takes a long position (buys) ten wheat contracts to take advantages of future increase in prices. Details of the wheat contract include:
- Contract size: 5,000 bushels
- Current (spot) price: $0.70 per bushel
- Futures price: $0.75 per bushel
Calculate his
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$3,500 |
||
|
$4,000 |
||
|
$3,000 |
||
|
$2,500 |
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