1. A farmer expects to harvest 50,000 bushels of wheat in August. He worries about the possibility of price fluctuations by August. The futures price of August wheat is $2 per bushel and 1 contract size is for 5,000 bushels. What must the farmer do to fix the $2 price? Suppose the price of wheat is actually $3.
2.  What are the farmer's gains and losses? Do the same for $1.

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