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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

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

Essentials Of Investments
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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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
Transcribed Image Text: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
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