The following information is available to you regarding cash and futures prices: Sep futures contract Price on Sep10 $5.89 $3.82 $3.77 $6.69 $6.59 $7.46 $4.71 $4.24 $3.69 $3.87 Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cash price on May 10 $5.07 $3.12 $4.18 $6.83 $7.42 $4.75 $3.59 $3.33 $3.40 $3.38 Cash price on Oct 31 $4.61 $3.15 $4.39 $6.22 $7.77 $4.32 $3.88 $3.22 $3.99 $3.80 May futures contract Price on May 10 $5.35 $3.54 $3.70 $7.04 $6.46 $7.10 $4.66 $3.96 $3.69 $3.87 Dec futures contract Price on May 10 $6.10 $3.75 $4.11 $7.18 $6.40 $8.17 $5.31 $4.36 $4.10 $4.37 Dec futures contract Price on Oct 31 $4.91 $3.09 $4.35 $7.64 $7.93 $4.71 $4.19 $3.54 $4.15 $3.77 Mar futures contract Price on Pct 31 $5.33 $3.24 $4.87 $7.72 $10.73 $4.76 $4.35 $4.54 $4.93 $4.48 1. Calculate the basis of each year for a corn producer who plants corn on May 10 and harvests/sells com cach Oct 31. Then calculate the 10-year simple average basis. (the only answer required here is the 10-year average)
The following information is available to you regarding cash and futures prices: Sep futures contract Price on Sep10 $5.89 $3.82 $3.77 $6.69 $6.59 $7.46 $4.71 $4.24 $3.69 $3.87 Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cash price on May 10 $5.07 $3.12 $4.18 $6.83 $7.42 $4.75 $3.59 $3.33 $3.40 $3.38 Cash price on Oct 31 $4.61 $3.15 $4.39 $6.22 $7.77 $4.32 $3.88 $3.22 $3.99 $3.80 May futures contract Price on May 10 $5.35 $3.54 $3.70 $7.04 $6.46 $7.10 $4.66 $3.96 $3.69 $3.87 Dec futures contract Price on May 10 $6.10 $3.75 $4.11 $7.18 $6.40 $8.17 $5.31 $4.36 $4.10 $4.37 Dec futures contract Price on Oct 31 $4.91 $3.09 $4.35 $7.64 $7.93 $4.71 $4.19 $3.54 $4.15 $3.77 Mar futures contract Price on Pct 31 $5.33 $3.24 $4.87 $7.72 $10.73 $4.76 $4.35 $4.54 $4.93 $4.48 1. Calculate the basis of each year for a corn producer who plants corn on May 10 and harvests/sells com cach Oct 31. Then calculate the 10-year simple average basis. (the only answer required here is the 10-year average)
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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1
Transcribed Image Text:Vinder
The following information is available to you regarding cash and futures prices:
Cash price on
May futures
Sep futures
Dec futures
Dec futures
Mar futures
Cash price on contract Price contract Price contract Price contract Price contract Price
Oct 31
Year
May 10
on May 10
on Sep10
on May 10
on Oct 31
on Pct 31
2011
$5.07
$4.61
$5.35
$5.89
$6.10
$5.33
$4.91
2012
$3.12
$3.15
$3.54
$3.82
$3.09
$3.75
$3.24
2013
$4.18
$4.39
$3.70
$3.77
$4.11
$4.35
$4.87
2014
$6.83
$6.22
$7.04
$6.69
$7.18
$7.64
$7.72
2015
$7.42
$7.77
$6.46
$6.59
$6.40
$7.93
$10.73
2016
$4.75
$4.32
$7.10
$7.46
$8.17
$4.71
$4.76
2017
$3.59
$3.88
$4.66
$4.35
$4.71
$5.31
$4.19
2018
$3.33
$3.22
$3.96
$4.24
$4.36
$3.54
$4.54
2019
$3.40
$3.99
$4.15
$4.93
$3.69
$3.69
$4.10
2020
$3.38
$3.80
$3.87
$3.87
$4.37
$3.77
$4.48
1. Calculate the basis of cach year for a con producer who plants com on May 10 and harvests/sells com each
Oct 31. Then calculate the 10-year simple average basis. (the only answer required here is the 10-year
average)
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