Loose-Leaf Essentials of Investments
Loose-Leaf Essentials of Investments
10th Edition
ISBN: 9781259604966
Author: Kane, Alex, Marcus Professor, Alan J., Bodie Professor, Zvi
Publisher: McGraw-Hill Education
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Chapter 2, Problem 25PS
Summary Introduction

To calculate:

The profit or loss of the contract for December 15 delivery, that closes in December at $3.95 per bushel.

Introduction:

A futures contract is one where the delivery of the asset happens on the maturity date and at the agreed upon price. This agreed upon price is referred to as the futures price. These are legal contracts that allow buying and selling of underlying assets at a specific future date for a specified price. The future contracts are traded on the stock exchanges. These are generally used as hedging tools. In these standardized contracts, the traders are obliged to sell or to purchase the underlying assets.

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Loose-Leaf Essentials of Investments

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