Question: You just heard a news story about mad cow disease
You just heard a news story about mad cow disease in a neighboring country, and you believe that feeder cattle prices will rise dramatically in the next few months as buyers of cattle shift to U.S. suppliers. Someone else believes that prices will fall in the next few months because people will be afraid to eat beef. You go to the CME and find out that feeder cattle futures for delivery in April are currently quoted at 88.8. The contract size is 50,000 lbs. What is the market value of 1 contract?
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