ADM purchases 55,000 bushels of soybeans in July. In January, when the spot price of soybeans...
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ADM purchases 55,000 bushels of soybeans in July. In January, when the spot price of soybeans was $10.56/bushel, ADM hedged the entire planned purchase with September futures contracts at 1030. Soybean futures are defined as 5,000bu, $0.01/bu. ADM lifts the hedge in July. The spot price of soybeans is now $10.50/bushel and the basis on September futures is now $0.09. What is ADM's effective price per bushel for the transaction (rounded positive $ two places after the decimal)? ADM purchases 55,000 bushels of soybeans in July. In January, when the spot price of soybeans was $10.56/bushel, ADM hedged the entire planned purchase with September futures contracts at 1030. Soybean futures are defined as 5,000bu, $0.01/bu. ADM lifts the hedge in July. The spot price of soybeans is now $10.50/bushel and the basis on September futures is now $0.09. What is ADM's effective price per bushel for the transaction (rounded positive $ two places after the decimal)?
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The effective price per bushel for the transaction is 1059 Calculation Purcha... View the full answer
Related Book For
Fundamentals of Investment Management
ISBN: 978-0078034626
10th edition
Authors: Geoffrey Hirt, Stanley Block
Posted Date:
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